Full text of "The Indian contract act : with a commentary, critical and explanatory"

. 




UNIVERSITY 

OF CALIFORNIA 

LOS ANGELES 



SCHOOL OF LAW 
LIBRARY 



o 



tl 





p 



INDIAN CONTRACT ACT, 

WITH A COMMENTAKY, CRITICAL AND 
EXPLANATORY. 



SIR FREDERICK POLLOCK, BART., 

OF LINCOLN'S INN, BARRISTER-AT-LAW ; D.C.L., HON. LL.D., EDINBURGH, DUBLIN, 

AND HARVARD ; PAST FELLOW OF TRINITY COLLEGE, CAMBRIDGE, AND 

HON. FELLOW OF C.C.C., OXFORD; LATE CORPUS PROFESSOR OF 

JURISPRUDENCE, OXFORD; CORRESPONDENT OF Till: 

INSTITUTE OF FRANCE ; AUTHOR OF 

" PRINCIPLES OF CONTRACT," ETC. 



ASSISTED BY 

DINSHAH FARDUNJI MULLA, M.A., LL.B., 

ADVOCATE, HIGH COURT, BOMBAY ; FELLOW OF BOMBAY UNIVERSITY ; PRINCIPAL AND 

PERRY PROFESSOR OF JURISPRUDENCE, GOVERNMENT LAW SCHOOL, BOMBAY ; 

AUTHOR OF " COMMENTARIES ON THE CODE OF CIVIL PROCEDURE," 

" PRINCIPLES OK MAHOMEDAN LAW," ETC. 



SECOND EDITION. 



LONDON : 

SWEET & MAXWELL, LIMITED, 3, CHANCERY LANE, 



BOMBAY : 

THACKER & COMPANY, RAMPART Row, 

|looksllcrs an& |JMts{jErs. 

N. M. TRIPATHI & CO., PRINCESS STREET, KALKADEVI ROAD, 

fBoahscllers antr |3ublis frets. 

1909. 

[All Miyhtx, iitciuilinij Itiylit of Tiwtttt/iitioH, l&ferred.] 



BKADBURY, AGNEW, & CO. LI)., PRINTERS, 
LONDON AKD TONBR1DGE. 



I 



f 

PREFACE TO THE SECOND EDITION. 



IN the present edition, besides the additions rendered necessary 
by decisions of Indian and English Courts reported since the publica- 
tion of the first, some new features are introduced in order to make 
the book more useful to practitioners. 

It has been thought well to enlarge the commentaries on the 
chapters dealing with Sale, Agency, and Partnership, and to entrust 
the two former topics to writers who have given* special attention 
to them. Accordingly the commentary on Sale has been revised 
by Mr. James Bromley Eames, B.C.L., of the Middle Temple, and 
the commentary on Agency by Mr. William Bowstead, of the same 
Inn. I have no hesitation in vouching for the quality of their 
work, though no such warranty seems needful. Then I have 
myself made such additions as seemed desirable in the chapter on 
Partnership. 

Eeferences have now been added to the unofficial reports com- 
monly cited in British Indian Courts, namely, the Calcutta Weekly 
Notes, the Bombay Laiv Reporter, the Madras Law Journal, the 
Allahabad Weekly Notes, and the Punjab Record. In my own view 
the regular reports in the High Courts are already too voluminous 
and indiscriminate, but this does not make it less probable that 
they sometimes omit decisions of real importance. At all events 
the other reports mentioned are current even in the High Courts, 
and text- writers can only take things as they find them. 

This is not the season to complain of the Government of India 
for not having leisure to undertake a thorough revision of the 
Contract Act. One can only repeat that it has remained unrevised 
longer than any codifying Act ought, and hope that the Legislative 
Department will not lose sight of the matter. 

F. P. 

LINCOLN'S INN, 
January, 1909. 



PREFACE TO THE FIRST EDITION. 



THE Indian Contract Act is in effect, and for the reasons explained 
in our commentary on the first section, a code of English law. 
Like all codes based on an existing authoritative doctrine, it 
assumes a certain knowledge of the principles and habits of thought 
which are embodied in that doctrine. But, unlike European codes, 
it has to be applied in practice by magistrates and pleaders to whom 
the materials and surroundings of its own system are unfamiliar. 
It seems proper, therefore, that editors of an Anglo-Indian Code 
should give a pretty full exposition of those fundamental notions in 
the Common Law which are concisely declared, with or without 
modification, by the text. How far they have in fact been modified, 
and whether by deliberate design or by accident in the execution, is 
a question of interpretation depending not on the text alone, but on 
its relations to the English authorities which the framers of the code 
had before them, and to the subsequent development of English 
law. My first object has been to make those relations as clear as 
possible. For this purpose I have given more elementary explana- 
tion than would be required in a treatise addressed only to English 
lawyers or to practitioners in the High Courts, while I have 
endeavoured to avoid entering on details of procedure and other 
purely English technical matters beyond what w r as necessary for 
understanding the substance of the authorities. 

We also have by this time a considerable number of reported 
Indian decisions on the Act. As it did not seem to me possible for 
an English lawyer who had not practised in India to deal adequately 
with these, I consented to undertake this edition only on the terms 
of the Indian cases being collected and digested by a competent 
person within the jurisdiction. Accordingly this task was entrusted 
to Mr. D. F. Mulla, who has performed it, so far as I can judge, 
completely and faithfully. I do not profess to have verified all his 
references, but I have verified and considered enough of them to be 
satisfied that his work is trustworthy. With the form of it I have 



VI PREFACE TO THE FIRST EDITION. 

interfered as little as might be, though some rearrangement and 
recasting was needful in order to combine Mr. Mulla's portion 
with my own in a continuous whole. The result is that Mr. Mulla, 
while he is answerable for the inclusion of all Indian reported cases 
which ought to be cited for the use of practitioners, is not necessarily 
answerable for the distribution of them as appropriate to this or 
that section, or for the opinions expressed. At the same time I 
have seldom found occasion to differ with Mr. Mulla. Much oftener 
I have been able to strengthen his conclusions by the analogy 
of recent English doctrine, and to state them with increased 
confidence. 

The present commentary is critical as well as explanatory. The 
criticism unavoidably follows the Act section by section, and is 
therefore broken up into many comments on details. In order to 
give a general notion beforehand of the causes which have made it 
necessary, and the spirit, I trust no captious one, in which it was 
undertaken, I now repeat the words I used in an unsigned review 
of Dr. Whitley Stokes's "Anglo-Indian Codes" on the publication of 
the first volume in 1887 : " Every written law which goes beyond 
mere regulation of details is a work of art ; it can no more afford to 
dispense with unity of design and continuity of execution than a 
monumental building. It should proceed from one mind, or from 
very few minds working in intimate association, and it should be 
framed, if not by one hand, at least under uniform general direction 
and by hands trained in one school. Where these conditions 
cannot be satisfied in the first instance, the next best thing is to 
secure a certain measure of uniformity by careful authoritative 
revision in the final stage. In England even this is seldom attain- 
able. . . . The Government of India is less hampered, though not 
quite so free as might be supposed, and it may be said to have made 
good progress in founding a school of legislative composition. The 
results obtained are, on the whole, worthy of the succession of 
distinguished men whose services in the Governor-General's Council 
are commemorated by Mr. Whitley Stokes ; and we must add that 
no small share of the labour and the credit belongs to Mr. Stokes 
himself. Still there has been in some cases a want of continuity. 
Measures long held in suspense, perhaps by excessive scruples, have 
been finished and passed in something like haste. Not only the 
work of different hands, but work done from quite different points 



PREFACE TO THE FIRST EDITION. Vll 

of view, has been pieced together with an incongruous effect. . . . 
Another source of unequal workmanship, and sometimes of positive 
error, is that the framers of the Indian Codes, and of the Contract 
Act in particular, were tempted to borrow a section here and a section 
there from the draft Civil Code of New York, an infliction which 
the sounder lawyers of that State have been happily successful so 
far in averting from its citizens. This code is in our opinion, and 
we believe in that of most competent lawyers who have examined 
it, about the worst piece of codification ever produced. It is 
constantly defective and inaccurate, both in apprehending the rules 
of law which it purports to define and in expressing the draftsman's 
more or less satisfactory understanding of them. The clauses on 
fraud and misrepresentation in contracts which are rather worse, 
if anything, than the average badness of the whole were most 
unfortunately adopted in the Indian Contract Act. Whenever this 
Act is revised everything taken from Mr. Dudley Field's code should 
be struck out, and the sections carefully recast after independent 
examination of the best authorities." In fact, the Contract Act 
passed through not less than three distinct stages.' First, there was 
the draft prepared in England by the Indian Law Commission, 
uniform in style and possessing great merit as an elementary state- 
ment of the combined effect of common law and equity doctrine as 
understood about forty years ago. By the courtesy of the India 
Office I have had the use of this draft, and it is often referred to in 
the commentary for comparison with the final text of the Act. 
Next, this was revised and in parts elaborated by the Legislative 
Department in India. The borrowing from the New York draft Code 
seems to belong to this phase. Lastly, Sir James Stephen made or 
supervised the final revision, and added the introductory definitions, 
which are in a wholly different style and not altogether in harmony 
with the body of the work. Evidently this process could not satisfy 
the conditions of a model code. It is much to the credit of the 
workmen that the result, after allowing for all drawbacks, was a 
generally sound and useful one. 

In many of the arguments and some of the judgments in the 
reports of the Indian High Courts there appears, if I mistake not, 
a tendency to follow English authorities too literally (though in 
any case they are not positively binding on Indian Courts), con- 
sidering only what the Courts actually decided in England, and 



Vlll PREFACE TO THE FIRST EDITION. 

not what they would have decided if their office had been to apply 
the principles of the Common Law to the facts of Indian society. 
The best way to counteract such a tendency is not to neglect the 
letter of English judgments, which is not practicable and would 
not be useful, but to enter more fully into their spirit and distin- 
guish their permanent from their local and accidental elements. 
To this object I have endeavoured, within the bounds of my 
undertaking, to contribute. 

F. P. 



LINCOLN'S INN, 

May, 1905. 



TABLE OF CONTENTS. 



PAOK 

PREAMBLE 1 

PRELIMINARY. 

SECTIONS 

1. Short title 1 

Extent ............. 1 

Commencement ........... 1 

Enactments repealed .......... 1 

Law anterior to Contract Act ....... 1 

Introduction of native law of contract into India . ... 2 

Native law of contracts as administered by High Courts . . 3 

Law administered in Mufassal Courts 4 

Applicability of the Act 5 

Scope of the Act .......... 6 

How far native law of contracts still in force .... 6 

Acts and regulations not expressly repealed . . . . . 7 

Saving of usage or custom of trade 7 

Evidence as to usage of trade 8 

Choice of law governing contract 9 

Act not retrospective . . . ... . . 10 

2. Interpretation clause .......... 10 

Summary of s. 2 . . . . . . . . 11 

Proposal and promise ......... 12 

Promise and consideration . . . . . . 13 

Definition of consideration 14 

Past consideration .......... 20 

Forbearance as consideration 22 

Compromise ........... 23 

Apparent forbearance when really an act ..... 23 

Mutual promises . . . . . . . . 23 

Promises of forbearance ........ 24 

Agreement and contract 25 

CHAPTER I. 
OF THE COMMUNICATION, ACCEPTANCE, AND REVOCATION OF PROPOSALS. 

3. Communication, acceptance, and revocation of proposals . . 26 

Communication of special conditions 27 

Incorporation of prospectus in a policy of assurance ... 29 

4. Communication when complete ........ 29 

Agreement between parties at a distance ..... 30 



X TABLE OF CONTENTS. 

SECTIONS PAGE 

4. Communication when complete continued. 

English rules ........... 31 

Revocation arriving before acceptance 32 

5. Revocation of proposals and acceptances . . . . 33 

Revocation of offers 33 

Sale by auction .......... 34 

Standing offers ..... ..... 35 

6. Revocation, how made .......... 36 

Notice of revocation 37 

Revocation not presumed . . . . . . . . 38 

Lapse of time for acceptance ....... 39 

Condition precedent to acceptance 39 

Death or insanity of proposer ....... 40 

7. Acceptance must be absolute ......... 40 

Certainty of acceptance ........ 40 

Apparent without real acceptance 44 

Manner of acceptance ......... 44 

8. Acceptance by performing conditions, or receiving consideration . 45 

General offers 45 

Acting on offer when sufficient acceptance . . . . . 47 

9. Promises, express and implied 50 

Express and tacit promises . . . . . . 50 

CHAPTER II. 
OF CONTRACTS, VOIDABLE CONTRACTS, AND VOID AGREEMENTS. 

10. WJiat agreements are contracts . . . . . . . .51 

As to contracts required to be in writing 52 

Oral and documentary evidence 52 

Variance between print and writing . . . . 52 

As to law relating to registration ...... 52 

11. Who are competent to contract ........ 53 

Infancy 53 

Age of majority 54 

Minor's contract 55 

Necessaries 57 

Specific performance 58 

Fraudulent representation 58 

Persons otherwise disqualified from contracting ... 59 

12. What is a sound mind for the purpose of contracting . . . . 61 

Doubtful effect of the section 61 

13. " Consent " defined 62 

Apparent and real consent ........ 62 

Ambiguity ............ 64 

Fundamental error as to nature of transaction .... 65 

Consent and estoppel 67 

Parda-nishin cases 68 

Error as to person of other party 68 

Error as to subject-matter of agreement ..... 69 

Coercion wholly excluding consent 70 



TABLE OF CONTENTS. XI 



14. " Free consent " defined . . . . . - . . . .70 

Unfree consent .......... 71 

15. " Coercion " defined .......... 71 

Extent of ' ' coercion " under the Act 72 

Act forbidden by Penal Code 72 

16. " Undue influence " defined . . . . . . 74 

Doctrine of undue influence in England 75 

Sub-s. 1 : Undue influence generally 76 

Sub-s. 2 : Different forms of influence ...... 77 

Mental distress .......... 79 

Transactions with Parda-nishin women ..... 80 

Who is a Parda-nishin ......... 82 

Sub-s. 3 : Rule of evidence 83 

Unconscionable bargains . . . . . . 83 

Lapse of time and limitation 87 

17. "Fraud" defined 88 

Fraud in general .......... 88 

Acts and omissions specially declared to be fraudulent . . . 90 

Mere non-disclosure ......... 91 

18. " Misrepresentation " defined . . . . . . 91 

Principles of English law as to misrepresentation ... 92 

Misrepresentation of fact or law 97 

19. Voidability of agreements ivitliout free consent. . . . 98 

Scope of section 99 

Exception : Means of discovering truth 100 

Explanation : As to " causing consent " . . . . 102 

Rescission of voidable contracts 103 

Specific performance ......... 103 

19A. Power to set aside contract induced by undue influence . . . 103 

20. Agreement void where both parties are under mistake as to matter 

of fact 105 

Scope of the section 105 

Mistake must be as to existing fact . . . . . . 106 

Specific performance ......... 108 

Rectification .......... 108 

Compensation ........... 108 

21. Effect of mistakes as to law 108 

22. Contract caused by mistake of one party as to matter of fact . . Ill 

23. What considerations and objects are lawful, and what not . . 112 

Unlawful objects . . . . . . . . 113 

Acts " forbidden by law " 117 

1. Legislative enactments ....... 120 

2. Rules of Hindu and Mahomedan law .... 123 

3. Other rules of law in force in British India . . . 125 

1. Trading with enemy 129 

2. Stifling prosecution ........ 130 

3. Champerty and maintenance ...... 132 

4. Interference with course of justice ... . . 138 

5. Marriage brocage contracts ...... 138 



Xll TABLK OF CONTENTS. 



23. What considerations and objects are lawful, and ivhat not continued. 

Unlawful objects continued. 

6. Agreements tending to create interest against duty . . 142 

7. Sale of public offices 142 

8. Agreements tending to create monopolies . . . . 143 

Waiver of illegality 144 

Pleadings . . . . . . . . . 144 

Other statutory provisions of similar effect 

1. Trust Act 144 

2. Transfer of Property Act IV of 1882 . . 144 

3. Indian Evidence Act I of 1872 . . . 144 

4. Specific Belief Act I of 1877 . . . . 144 

Void Agreements. 

24. Agreements void if considerations and objects unlawful in part . 145 

Entire or divisible agreements 145 

Indian Trusts Act, 1882 147 

25. Agreement ^vithout consideration, void, unless it is in writing and 

registered ............ 148 

Or is a promise to compensate for something done . . . 148 

Or is a promise to pay a debt barred by limitation law . . 148 

Consideration 149 

Forbearance and compromise as consideration . . . 150 

Promise to perform existing duty ...... 151 

Transfer of immoveable property ....... 153 

Negotiable instruments 154 

Registered writing 154 

Compensation for voluntary services ...... 156 

Promise to pay a barred debt ........ 158 

Agent generally or specially authorised in that behalf . . 159 

Debt 159 

26. Agreement in restraint of marriage void ...... 162 

27. Agreement in restraint of trade void 163 

Saving of agreement not to carry on business of which goodwill is 

sold 163 

Of agreement betiveen partners prior to dissolution . . . 163 

Or during continuance of partnership 163 

Agreements in restraint of trade 164 

Restraint during term of service 166 

Public policy . . 166 

Agreements not in restraint of trade 168 

Trade combinations . . 168 

Lex loci contractus 172 

28. Agreements in restraint of legal proceedings void . . . . 172 
Saving of contract to refer to arbitration dispute tJiat mat/ (trine . 172 

Suits barred by such contracts [rep.] 172 

Saving of contract to refer questions that have already arisen . 172 

Scope of the section ......... 172 



TABLE OF CONTENTS. Xlll 

SECTIONS PAGE 

28. Agreements in restraint of legal proceedings void continued. 

Limitation of time to enforce rights under a contract . . 175 

Remedies for breach of agreement to refer ... . . 177 

Conventional restrictions of evidence ...... 177 

29. Agreements void for uncertainty 177 

Ambiguous contracts . . . . . . . . ' . 178 

30. Agreements by way of wager void ........ 179 

Exception in favour of certain prizes for horse racing . . . 180 

Section 294A of the Indian Penal Code not affected . . . . 180 

Wagering contracts 180 

What is a wager ? . . 180 

Agreements collateral to wagering contracts .... 186 

Speculative transactions ........ 189 

Oral evidence of agreement being by way of wager . . . 190 

Wagering policies . . . . . . . ... 193 

Void . 194 

What is a lottery ? 195 

CHAPTER III. 
OF CONTINGENT CONTRACTS. 

31. " Contingent contract " defined ........ 195 

Section in general 196 

Contingency dependent on act of party 197 

32. Enforcement of contracts contingent on an event happening . . 199 

33. Enforcement of contracts contingent on an event not happening . 200 

34. When event on which contract is contingent to be deemed impossible, 

if it is the future conduct of a living person ..... 200 

35. When contracts become void which are contingent on happening of 

specified event within fixed time ....... 200 

When contracts may be enforced which are contingent on specified 

event not happening within fixed time ...... 201 

36.. Agreement contingent on impossible events void ..... 201 



CHAPTER IV. 

OF THE PERFORMANCE OF CONTRACTS. 
Contracts ivhich must be performed. 

37. Obligation of parties to contracts 202 

Performance and discharge 202 

Succession to benefit of contract 203 

Assignment of contracts ......... 205 

Any other law 209 

38. Effect of refiisal to accept offer of performance . , . . 209 

Tender 210 

Offer must not be of part only ....... 211 

Offer must be unconditional ....... 212 

Able and willing 212 



XIV TABLri OF CONTENTS. 



38. Effect of refusal to accept offer of performance continued. 

Tender of instalments 213 

Reasonable opportunity 213 

Tender of money ......... 215 

Legal tender 215 

Offer to one of several joint promisees 215 

39. Effect of refusal of party to perform promise wholly . . . . 215 

Refusal to perform contract 216 

Contract of service 222 

Insolvency of promisor 223 

By whom Contracts must be performed. 

40. Person by whom promise is to be performed ... . . 223 

Personal contracts 224 

41. Effect of accepting performance from third person . . . . 225 

42. Devolution of joint liabilities ........ 225 

43. Any one of joint promisors may be compelled to perform . . . 226 
Each promisor may compel contribution ...... 226 

Sharing of loss by default in contribution . . . . . . 226 

Joint promisors 227 

Effect of decree against some only of joint promisors . . . 227 

Suit against one of several partners 229 

Contribution between joint promisors 231 

When liability to contribute arises ...... 231 

Contribution as between judgment debtors . . . . 231 

44. Effect of release of one joint promisor ...... 232 

45. Devolution of joint rights ......... 233 

Promise to two or more persons jointly 233 

Right to performance of promises during joint lives . . . 233 

Validity of discharge by one of several joint promisees . . 234 

Suit by surviving partner ........ 235 

Suit by representative of deceased partner 236 

Right of performance of representative jointly with survivor . 236 

Survivorship in case of Government securities . . . 236 

Time and Place for Performance. 

46. Time for performance of promise where no application is to be made 

and no time specified 237 

Reasonable time 237 

47. Time and place for performance of promise where time is specified, 

and no application to be made ....... 238 

Common Law rule 238 

Delivery on Sunday 238 

48. Application for performance on certain day to be at proper time and 

place 239 

49. Place for performance of promise where no application to be made 

and no place fixed for performance ...... 239 

Rule of Common Law ......... 239 

Place of delivery ' 240 



TABLE OF CONTENTS. XV 

SECTIONS PAGE 

50. Performance in manner or at time prescribed or sanctioned by 

promisee ............ 241 

Performance of Reciprocal Promises. 

51. Promisor not bound to perform, unless reciprocal promisee ready 

and willing to perform ......... 241 

Simultaneous performance ........ 242 

Waiver of performance ........ 244 

Readiness and willingness ........ 244 

Averment of performance 245 

52. Order of performance of reciprocal 'promises ..... 246 

53. Liability of party preventing event on which contract is to take effect 246 

Impossibility created by act of party 247 

54. Effect of default as to that promise which should be first performed, 

in contract consisting of reciprocal promises . . . . . 248 

Default of promisor in first performance 249 

55. Effect of failure to perform at fixed time, in contract in which time 

is essential ............ 250 

Effect of such failure when time is not essential .... 250 

Effect of acceptance of performance at time other than that agreed 

upon . . . . . . . . . . . . . 250 

Time when of essence of contract ...... 251 

56. Agreement to do impossible act ........ 252 

Contract to do act afterwards becoming impossible or unlawful . 252 
Compensation for loss through non-performance of act known to be 

impossible or unlawful ......... 252 

Impossibility in general ......... 253 

57. Reciprocal promise to do things legal and also other things illegal . 257 

Scope of the section 257 

58. Alternative promise, one branch being illegal . . . . . 257 

Appropriation of Payments. 

59. Application of payment where debt to be discharged is indicated . 258 

Appropriation of payments ........ 258 

Several distinct debts 259 

60. Application of payment where debt to be discharged is not indicated 259 

Creditor's right to appropriate 259 

61. Application of payment where neither party appropriates . . 260 

Contracts which need not be performed. 

62. Effect of novation, rescission, and alteration of contract . . . 261 

Novation 261 

Alteration of contract ......... 264 

Transfer of actionable claims 265 

Promissory note on account of pre-existing debt . . . . 265 

Unauthorised alteration of documents 265 

Indian decisions .......... 266 

63. Promisee may dispense with or remit performance of promise . . 271 

Rule of the common law 272 

Scope of the section . . 273 



XVI TABLE OF CONTENTS. 



63. Promisee may dispense iviih or remit performance of promise continued. 

Remission of performance 273 

Agreement to extend time ........ 274 

64. Consequences of rescission of voidable contract 275 

Scope of the section 275 

Minor's contract 276 

Election to rescind 276 

65. Obligation of person who has received advantage under void agree- 

ment or contract that becomes void 278 

Duties of restitution 278 

Scope of the section 278 

Limitation 283 

66. Mode of communicating or revoking rescission of voidable contract . 284 

67. Effect of neglect of promisee to afford promisor reasonable facili- 

ties for performance 284 

Refusal or neglect of promisee 285 

CHAPTER V. 
OF CERTAIN RELATIONS RESEMBLING THOSE CREATED BY CONTRACT. 

68. Claim for necessaries supplied to person incapable of contracting, 

or on his account 285 

Minors 286 

What are necessaries 286 

69. Eeimbursement of person paying money due by another, in pay- 

ment of ivhicli lie is interested 286 

English law 287 

Suit for contribution 290 

Person making payment must not be legally liable to pay . . 293 

Payment must be to another ....... 293 

70. Obligation of person enjoying benefit of non-gratuitous act . . . 294 

Non-gratuitous act done for another 294 

71. Responsibility of finder of goods 298 

Liability of finder 298 

72. Liability of person to whom money is paid, or thing delivered, by 

mistake or under coercion 299 

Payment under mistake of fact or mistake of law . . . 299 

Involuntary payment . 300 

Wrongful payment 301 

CHAPTER VI. 
OF THE CONSEQUENCES OF BREACH OF CONTRACT. 

73. Compensation for loss or damage caused by breach of contract . . 302 
Compensation for failure to discharge obligation resembling those 

created by contract 302 

Rule in Hadley v. Baxendale 311 

Contracts relating to immoveable property 316 

Interest by way of damages 318 

Section applies only where contract broken .... 320 



TABLE OF CONTENTS. 
\A 

SECTIONS . PAGE 

74. Compensation for breach of contract where penalty stipulated for . 320 

Penalty and liquidated damages 322 

Amendment 323 

Stipulations for interest . . . ' 325 

I. Stipulations for enhanced rate of interest . . . 326 

II. Stipulations for compound interest 331 

III. Stipulations for payment of interest if principal not 

paid on due date 334 

75. Party rightfully rescinding contract entitled to compensation . . 342 

CHAPTER VII. 

SALE OF GOODS. 
When Property in Goods sold passes. 

76. " Goods " defined 342 

Frame of the chapter 342 

Meaning of " goods " 343 

Moveable property . . 343 

Old English forms of action . 343 

77. " Sale " defined 344 

Essential requisites of sale 344 

Contract of sale distinguished from contract for work . . . 345 

Sale or bailment 347 

Sale or hire 347 

Sale or agency 347 

78. Sale, ho^v effected 347 

History of the law 348 

Delivery 350 

When property passes 350 

Evidence . 351 

Sale or return .......... 351 

Earnest . . . 353 

79. Transfer of ownership of thing sold which has yet to be ascertained, 

made or finished 354 

Transfer of ownership . 354 

Unfinished ships 355 

80. Completion of sale of goods which the seller is to put into state in 

which buyer is to take them 357 

Transfer of ownership ......... 357 

81. Completion of sale of goods when seller has to do anything thereto 

in order to ascertain price ......... 359 

Transfer of ownership ......... 360 

82. Completion of sale when goods are unascertained at date of contract 361 

83. Ascertainment of goods by subsequent appropriation . . . . 361 

Delivery of goods to carrier 363 

84. Ascertainment of goods by seller's selection 368 

85. Transfer of ownership of moveable property, when sold together 

with immoveable 369 

Mixed sales of moveable and immoveable property . . . 369 

i.e. b 



XViii TABLE OF CONTENTS. 



86. Buyer to bear loss after goods have become his property . . . 369 

Risk of destruction or injury 370 

87. Transfer of ownership of goods agreed to be sold while non-existent 371 

Sale of goods to be produced in future 372 

88. Contract to sell and deliver, at a future day, goods not in seller's 

possession at date of contract . . . . . . . 373 

Future delivery 374 

89. Determination of price not fixed by contract ... . . 374 

Delivery. 

90. Delivery how made 375 

Acceptance and receipt 376 

" Symbolic " delivery . . . 377 

Constructive delivery 378 

91. Effect of delivery to 'wharfinger or carrier 380 

Delivery to wharfinger or carrier ....... 381 

92. Effect of delivery 382 

Part delivery 382 

93. Seller not bound to deliver until buyer applies for delivery . . 384 

Buyer's duty to apply for delivery 384 

94. Place of delivery 384 

Place of delivery .......... 384 

Distinction between contract of sale of goods and contract to 

deliver goods in payment of debt 385 

Seller's Lien. 

95. Seller's lien 385 

Seller's lien 385 

96. Lien where payment to be made at a future day, but no time fixed 

for delivery ........... 387 

" Insolvency" defined . . . . . . . * . 387 

Seller's lien where the sale is on credit . . . . . . 387 

97. Seller's lien whefe payment to be made at future day, and buyer 

allows goods to remain in seller's possession ..... 389 

Seller's lien where the price is to be paid at a future day . . 389 

Effect of buyer's insolvency before completion of contract . . 390 

98. Seller's lien against subsequent buyer ....... 390 

Lien against subsequent buyer 390 

Stoppage in Transit. 

99. Power of seller to stop in transit 391 

Stoppage in transit 391 

Conditions under which right of stoppage in transit may be 

exercised 392 

Title to seller's rights 393 

100. When goods are to be deemed in transit . . . . . 394 

English authorities 395 

Indian authorities 399 

Public wharves 400 

101. Continuance of right of stoppage 400 



TABLK OF CONTENTS. XIX 



102. Cessation of rig Id on assignment by buyer of bill of lading . . 401 

Rule of English law . . 401 

Bills of Lading Act 402 

103. Stoppage where bill of lading is pledged to secure specific advance . 402 

English authorities 403 

Specific advance .......... 405 

104. Stoppage how effected ......... 405 

105. Notice of setter's claim .......... 406 

106. Right of seller on stoppage . . . . . . . . 407 

He-sale. 

107. Re-sale on buyer's failure to perform 407 

Re-sale 407 

Right of re-sale does not bar other remedies . . ... 408 

Re-sale clause in indents 409 

Reasonable time .......... 409 

Title. 

108. Title conveyed by seller of goods to buyer . . . . . . 409 

History of the section . . . . . . . . 411 

Indian Factors Acts 412 

Character of vendor's possession 413 

Seller with voidable title 416 

Good faith, etc 417 

Documents showing title of goods 418 

Joint owners : Presumption in case of joint Hindu family . . 418 

Delivery order 418 

Warranty. 

109. Seller's responsibility for badness of title 419 

Warranty and condition ........ 419 

Seller responsible for title ........ 420 

110. Establishment of implied warranty of goodness or quality . . 421 

Warranty implied by usage of trade . . . . . . 421 

Merchandise Marks Act IV of 1889 422 

111. Warranty of soundness implied on sale of provisions . . . . 422 

Warranty on sale of provisions ....... 422 

112. Warranty of bulk implied on sale by sample . . . . . 423 

Warranty on sale of goods by sample ...... 423 

113. Warranty implied where goods are sold as being of a certain 

denomination ........... 425 

Warranty as to denomination of goods . . . . . . 425 

114. Warranty where goods ordered for a' specified purpose . . . 426 

English authorities . . . . - . . . . . 427 

115. Warranty on sale of article of well-known ascertained kind' . . 428 

No warranty implied on sale of a specific chattel . . . . 429 

116. Seller ivhen not responsible for latent defects ..... 429 

What is a latent defect 430 



XX TABLE OF CONTENTS. 

SECTIONS PAGE 

117. Buyer's right on breach of warranty ...... 430 

Consequences of breach of warranty : Where a specific article 
is sold 430 

118. Right of buyer on breach of warranty in respect of goods not 

ascertained ........... 431 

Where goods not ascertained at time of contract . . . 432 

Miscellaneous. 

119. When buyer may refrise to accept, if goods not ordered are sent with 

goods ordered ........... 433 

Where goods not ordered are sent with goods ordered . . 433 

120. Effect of wrongful refusal to accept 434 

121. Right of seller as to rescission on failure of buyer to pay price at 

time fixed 436 

122. Sale and transfer of lots sold by auction 437 

123. Effect of use by seller of pretended biddings to raise price . . 437 



CHAPTER VIII. 
OF INDEMNITY AND GUARANTEE. 

124. " Contract of indemnity " defined, 438 

Indemnity . . . . . . . . - . . . 438 

125. Rights of indemnity-holder when sued . . . . . . 439 

Rights of promisor 441 

126. "Contract of guarantee," "surety," "principal debtor," and 

" creditor " ........... 441 

127. Consideration for guarantee 442 

Consideration for a contract of guarantee 442 

128. Surety's liability 443 

Proof of surety's liability . 443 

Liability for whole or part of debt 444 

Surety's liability where original contract is void or voidable . . 445 

Administration and surety bonds 446 

Limitation 446 

129. " Continuing guarantee " 446 

Continuing guarantee 447 

130. Revocation of continuing guarantee 447 

Future transactions 448 

Notice 449 

Sureties for guardians and administrators 449 

131. Revocation of continuing guarantee by surety's death . . . 450 

What is a " contract to the contrary " 450 

132. Liability of tivo persons, primarily liable, not affected by arrange- 

ment between them that one shall be surety on other's default . 451 

Joint debtors and suretyship 451 

133. Discharge of surety by variance in terms of contract . . . 452 

Valuation of contract between creditor and principal . . . 453 



TABLE OF CONTENTS. XXI 



134. Discharge of surety by release or discharge of principal debtor . 457 

Creditor's discharge of principal debtor 458 

Discharge by operation of law 459 

Creditor's omission to sue principal within limitation period . . 459 

Guarantee under an agreement to give time to judgment debtor 462 

135. Discharge of surety when creditor compounds with, gives time to, 

or agrees not to sue, principal debtor . . . . . . 462 

Contract to give time to principal debtor 463 

Contrary agreement 464 

136. Surety not discharged when agreement made with third, person to 

give time to principal debtor ........ 464 

137. Creditor's forbearance to sue does not discharge surety . . . 465 

Forbearance to sue, what is 465 

138. Release of one co-surety does not discharge others . . . . 466 

Release of one of several sureties ...... 466 

139. Discharge of surety by creditor's act or omission impairing surety's 

eventual remedy - . 467 

Act or omission of creditor tending to impair surety's remedy . 467 

Act or omission impairing surety's eventual remedy . . . 468 

140. Bights of surety on payment or performance ..... 469 

141. Surety's right to benefit of creditor's securities . . ... 471 

Surety's right to benefit of securities ...... 472 

When surety becomes entitled to benefit of creditor's securities . 473 

142. Guarantee obtained by misrepresentation invalid .... 474 

143. Guarantee obtained by concealment invalid ... . . 474 

Guarantee obtained by misrepresentation or concealment . . 475 

What is a " material circumstance " 476 

144. Guarantee on contract that creditor shall not act on it until co-surety 

joins ............ 477 

145. Implied promise to indemnify surety 478 

Surety's right to indemnity ........ 478 

146. Co-sureties liable to contribute equally . . . . . . 480 

Contribution by co-sureties ........ 480 

147. Liability of co-sureties bound in different sums ... . . 481 

CHAPTER IX. 
OF BAILMENT. 

148. " Bailment," "bailor," and " bailee" defined ..... 482 

Nature of transaction 483 

No bailment where whole property transferred .... 484 

149. Delivery to bailee how made 485 

150. Bailer's duty to disclose faults in goods bailed .... 485 

151. Care to be taken by bailee ......... 487 

Common carriers . . . . . . . . . 488 

Carriers by railway 490 

Innkeeper ........... 491 

Burden of proof .......... 491 

Bailee's liability for negligence of servants 492 



XX 11 TABLK OF CONTENTS. 

SECTIONS I'AiK 

152. Bailee when not liable for loss, etc., of thing bailed . . . . 492 

Care to be taken by bailee ........ 493 

153. Termination of bailment by bailee is net inconsistent with conditions . 493 

154. Lin InlHij of bailee making unauthorised use of goods bailed . . 494 

155. Effect of mi.rture, until bailor's consent, of his (foods with bailee's . 495 

156. Effect of mixture, ivithout bailor's consent, when the goods can be 

separated 496 

157. Effect of mixture, without bailor's consent, when the goods cannot 

be separated . . . . . . . . . . . 496 

158. Repayment by bailor of necessary expenses 497 

159. Restoration of goods lent gratuitously 497 

160. Return of goods bailed, on expiration of time or accomplishment of 

purpose . . . . . . . . . . . . 498 

161. Bailee's responsibility ^vhen goods are not duly returned . . . 498 

162. Termination of gratuitous bailment by death 499 

163. Bailor entitled to increase or profit from goods bailed . . . 499 

164. Bailor's responsibility to bailee ........ 499 

165. Bailment by several joint owners . . . . . . . 500 

166. Bailee not responsible on redelivertj to bailor without title . . 500 

Estoppel of bailee 500 

167. Right of third person claiming goods bailed ..... 501 

168. Right of finder of goods ; may sue for specific reward offered . . 502 

169. When finder of thing commonly on sale may sell it .... 502 

170. Bailee's particular lien ......... 503 

Principle of bailee's lien ........ 503 

Contract to the contrary . . . . . . . 504 

171. General lien of bankers, factors, ivharfingers, attorneys, and policy - 

brokers 504 

General as distinct from particular lien : Bankers . . . . 504 

Factor ... 506 

Wharfingers 507 

Attorneys 508 

Bailment of Pledges. 

172. " Pledge," "pawnor" and "pawnee " defined . . . . . 509 

173. Pawnee' 's right of retainer 510 

174. Pawnee not to retain for debt or promise other than that for which 

goods pledged . Presumption in case of subsequent advances . . 510 

175. Pawnee's right as to extraordinary expenses incurred . . . 510 

176. Pawnee's right where pawnor makes default ... . 511 

Limitation ........... 512 

177. Defaulting pawnor' s right to redeem ....... 513 

Limitation ........... 513 

178. Pledge by x>osscssor of goods, or of documentary title to good* . . 513 

Indian Factors Acts 513 

Character of pledger's possession 513 

Antecedent debt .........' 515 

Good faith, etc 515 

Pledge by co-owner in possession ...... 516 

Competition between prior mortgagee and subsequent pledgee . 516 



TABLE OF CONTENTS. XX111 

SECTIONS PAGE 

179. Pledge where pawnor has only a limited interest .... 516 

Suits by Bailees or Bailors against Wrong-doers. 

180. Suits by bailor or bailee against wrong -doer . . . . 516 

181. Apportionment of relief of compensation obtained by such suits . 517 

CHAPTER X. 

AGENCy. 

Appointment and Authority of Agents. 

182. " Agent " and " principal " defined ....... 517 

Nature of agency in general . . . . . . . . 518 

Del credere agent ......... 518 

Co-agents ........... 519 

183. Who may employ agent ......... 519 

184. Who may be an agent 520 

185. Consideration not necessary . . . . . . . . 520 

186. Agent's authority may be expressed or implied 520 

Express authority . 520 

187. Definitions of express and implied authority 520 

Implied authority 521 

Husband and wife .......... 521 

188. Extent of agent's authority ........ 523 

Extent of authority .......... 523 

Construction of powers of attorney ...... 525 

Authority to do every lawful thing necessary for the purpose . 526 

Authority of counsel, attorney, and pleader .... 526 

Authority of factor .......... 527 

Authority of broker 527 

Authority of auctioneer 528 

Authority of shipmaster 529 

189. Agent's authority in an emergency 532 

Sub-agents. 

190. When agent cannot delegate ........ 532 

191. " Sub-agent" defined .......... 534 

192. Representation of principal by sub-agent properly appointed . . 534 

Agent's responsibility for sub-agent 534 

Sub-agent's responsibility ......... 534 

193. Agent's responsibility for sub-agent appointed without authority . 535 

194. Relation betiveen principal and person duly appointed by agent to 

act in business of agency ........ 536 

195. Agent's duty in naming such person ....... 537 

Ratification. 

196. Right of person as to acts done for him without his authority . 537 
Effect of ratification. 

Conditions of ratification ........ 537 

Retrospective effect ......... 539 

What acts cannot be ratified 540 

Agents of Government ....,..,. 540 



XXIV TABLE OF CONTENTS. 

SECTIONS PAGE 

197. Ratification may be expressed or implied 541 

198. Knowledge requisite for valid ratification . . . . . . 541 

199. Effect of ratifying unauthorised act forming part of a transaction. 542 

200. Ratification of unauthorised act cannot injure third person . . 542 

Revocation of Authority. 

201. Termination of agency 543 

Completion of business of agency ....... 544 

Death of principal ........ . 544 

Payment or act by attorney under power 544 

202. Termination of agency, where agent has an interest in subject-matter 544 

Authority coupled with interest 545 

Indian authorities . . 546 

Factors for sale of goods ........ 547 

203. When principal may revoke agent's authority . . . . 547 

What amounts to exercise of authority 547 

204. Revocation where authority has been partly exercised . . . . 548 

Authority partly exercised ........ 548 

205. Compensation for revocation by principal or renunciation by agent 549 

Compensation for revocation ........ 549 

206. N 'otice of revocation or renunciation ...... 550 

207. Revocation and renunciation may be expressed or implied . . . 550 

208. When termination of agent's authority takes effect as to agent, and 

as to third persons 550 

Time from which revocation operates 551 

209. Agent's duty on termination of agency by principal's death or 

insanity - ... 551 

210. Termination of sub-agent's autliority 552 

Agent's Duty to Principal. 

211. Agent's duty in conducting principal's business .... 552 

Departure from instructions 553 

Usage of trade 554 

Usage of Bombay market ; pakki adat system . . . . 554 

Usage of kacchi adat system in cotton business .... 555 

212. Skill and diligence required from agent 555 

Gratuitous agent 557 

213. Agent's accounts 557 

Agent's duty to account 557 

214. Agent's duty to communicate with principal . . . . . 558 

215. Right of principal when agent deals, on his own account, in business 

of agency without principal's consent ...... 558 

216. Principal's right to benefit gained by agent dealing on his own 

account in business of agency ........ 560 

Principal's rights to profits ........ 560 

Forfeiture of commission ......... 561 

Knowledge of principal 562 

Unauthorised profits of agent ........ 562 

Payments authorised by custom 562 

Agreements against agent's duty void , , ... , . 563 



TABLE OF CONTENTS. XXV 



217. Agent's right of retainer out of sums received on principal 1 s account 564 

Pakki adat 565 

218. Agent's duty to pay sums received for principal . . . . . 566 

Mode of payment .......... 566 

Payments in respect of illegal transaction . . ... 566 

219. When agent's remuneration becomes due ..... 567 

Agent prevented from earning remuneration 568 

220. Agent not entitled to remuneration for business misconducted . . 569 

221. Agent's lien on principal's property . 570 

Agent's lien 570 

How far lien effective against third person 571 

Lien of sub-agents 571 

How lien lost or extinguished 572 

Principal's Duty to Agent. 

222. Agent to be indemnified against consequences of lawful acts . . 573 

Limits of agent's indemnity 574 

Costs of defending action ........ 575 

223. Agent to be indemnified against consequences of acts done in good 

faith . . . 575 

Unlawful acts '.......... 576 

224. Non-liability of employer of agent to do a criminal act . . . 576 

225. Compensation to agent for injury caused by principal's neglect . 577 

Effect of Agency on Contracts ivith Third Persons. 

226. Enforcement and consequences of agent's contracts . . . . 578 

227. Principal how far bound when agent exceeds authority . . . 579 

228. Principal not bound when excess of agent's authority is not 

separable ............ 580 

229. Consequences of notice given to agent 580 

230. Agent cannot personally enforce, nor be bound by, contracts on 

behalf of principal 584 

Presumption of contract to the contrary ...... 584 

Principle of the rule and exceptions 584 

Contract to the contrary ...*.... 585 

Agency coupled with interest ........ 587 

Right of agent to sue for money paid by mistake . . . 588 

Presumed exceptions : Foreign principal 588 

Principal undisclosed 589 

Principal not liable 590 

Deed executed in agent's name ....... 591 

Sovereign States as principals ........ 591 

Negotiable instruments ........ 591 

Defendant's rights where agent sues in own name . . . . 592 

Effect of settlement with principal ...... 592 

231. Rights of parties to a contract made by agent not disclosed . . 593 

232. Performance of contract with agent supposed to be principal . . 593 

Rights of undisclosed principal 593 

Equities between agent and third party '.,.,. 595 



XXVI TABLE OF CONTENTS. 

SECTIONS TACiK 

233. Hight of person dealing with agent personally liable . . . 596 

Creditor's election 596 

234. Consequence of inducing agent or principal to act on belief that 

principal or agent will be held exclusively liable . . . 598 

235. Liability of pretended agent ........ 598 

Representation must be effective . . . . . . . 599 

Measure of damages 599 

236. Person falsely contracting as agent not entitled to performance . . 600 

237. Liability of principal inducing belief that agent's unauthorised acts 

were authorised .......... 601 

Ostensible authority . . . 601 

Notice of excess of authority . . . . . . 603 

238. Effect on agreement, of misrepresentation or fraud by agent . . 604 

Course of employment ......... 604 

Admission by agent .......... 607 

Privilege from distress of goods in hands of agent . . . 608 

Bribery of agent 609 

Eight of principal to follow property into hands of third person . 610 
Personal liability of agent to repay money received to principal's 

use 610 

CHAPTER XI. 

OF PARTNERSHIP. 

239. " Partnership " defined 612 

" Firm" defined : . . . . 612 

Definition and essentials of partnership 612 

Co-ownership and partnership ....... 613 

Profits 614 

Sharing profits 615 

Partnership and service . . . . . . . .617 

The firm 617 

Joint Hindu family firm ........ 619 

240. Lender not a partner by advancing money for share of profits. . . 620 

241. Property left in business by retiring partner, or deceased partner's 

representative ........... 622 

242. Servant or agent remunerated by share of profits not a partner . . 622 

243. Widow or child of deceased partner receiving annuity out of profits 

not a partner ........... 622 

244. Person receiving portion of profits for sale of goodwill not a partner 622 

245. Responsibility of person leading another to believe him a partner . 623 

Holding out 623 

Proof of holding out 624 

246. Liability of person permitting himself to be represented as a partner 625 

Holding out by acquiescence 625 

Not applicable to torts ......... 626 

Estoppel distinct in kind from actual authority .... 626 

247. Minor partner not personally liable, but his share is . . . . 627 

Difference from English law as to minor partners . . . 627 

Hindu minor's ancestral trade 627 



TABLE OF CONTENTS. XXV11 

SECTIONS PAGE 

248. Liability of minor partner on attaining majority . . . 628 

249. Partner's liability for debts of "partnership ..... 628 

Nature of partnership liabilities ....... 628 

250. Partner's liability to third person for neglect or fraud of co-partner 630 

Ground of liability : usage of firm, how material . . . 630 

251. Partner's power to bind co-partners 632 

Question as to necessity ......... 632 

General presumptions of authority in partnership att'airs . . 633 

Admissions by partners ......... 635 

Notice to partner ..'....... 635 

Authority in particular transactions . . . . . 635 

Exception : restriction of authority ...... 636 

252. Annulment of contract defining partners' rights and obligations . 638 

Variations by consent ......... 638 

253. Hides determining partners' mutual relations, where no contract to 

contrary ......... ... 638 

Sub-s. (1) Partnership property . . . . .' 640 

Goodwill 640 

Assets : benefit of contracts ..... 641 

Partner's share 641 

(2) Share in profits and losses . . . . . 642 

Partner's right to indemnity and contribution . . 643 

(3) (4) Eight and duty of partners to attend to business . . 643 

(5) Power of majority 643 

(6) New partners : assignment of share . . . 644 

(7) Dissolution of firm ... . . . . . 645 

(8) Partnership at will : tacit dissolution . . . . 645 

(9) Expulsion 645 

(10) Dissolution by death . . ... . . . 645 

Custody of books 646 

254. When Court may dissolve partnership . . . . . . 646 

Sub.-s. (3) Transfer of partner's share by operation of law . . 647 

(5) Gross misconduct 647 

(6) Business carried on at a loss 647 

Rescission for fraud .......... 647 

255. Dissolution of partnership by prohibition of business . . . 648 

256. Rights and obligations of partners in partnership continued after 

expiry of term for which it was entered into . . ... 648 

257. General duties of partners ........ 649 

258. Account to firm of benefit derived from transaction affecting 

partnership . . . . . . . . . . 649 

259. Obligations to firm of partner carrying on competing business . 650 

260. Revocation of continuing guarantee by change in firm . . . 651 

261. Non-liability of deceased partner's estate for subsequent obligations 651 

262. Payment of partnership debts, and of separate debts . . . 652 

263. Continuance of partners' rights and obligations after dissolution . 653 

Suit by surviving partner for debts to firm 654 

Use of partnership name ........ 654 

Duties between continuing and outgoing partners , . . . 655 



XXV111 TABLE OF CONTENTS. 



264. Notice of dissolution 656 

What notice required ......... 656 

265. Winding up by Court on dissolution or after termination . . 657 

Amendment 657 

Old section 657 

Suit for account 658 

Appointment of receiver 659 

Beceivers iu Indian practice 660 

Limitation period for a suit for dissolution ..... 660 

Costs in a suit for dissolution 661 

Form of plaint in a suit for dissolution 661 

266. Limited liability partnerships, incorporated partnerships and joint 

stock companies 661 

Schedule : Enactments repealed 662 

Appendix : Sale of Goods Act, 1893 663 

Partnership Act, 1890 687 

Index 703 



TABLE OF CASES. 



PAGE 

AAS v. Benham 650 

Abaji Sitaram r. Trimbak Muni- 
cipality 25,121, 273,282 

Abbakke Heggadthi r. Kin- 

hiamma Shetty 327,333,338 

Abbott, Exparte 608 

Abbott r. Wolsey 376 

Abdool Hakim r. Doorga Proshad 136 
Abdool Hoosein v. Goolam 

Hoosein 267 

Abdul r. Hussenbi 124 

Abdul Aziz r. Appayasami 10 

Abdul Ganit'. Nandlal 296, 

326, 328, 330 
Abdul Hassan Khan r. Rangi Lai 514 

Abdulla r. Mammod 118 

Abdulla Khan i\ Girdhari 101 

Abel r. Button 521 

Acatos r. Burns 531, 532 

Acchhan Bibi v. Sakina 81 

Acebal r. Levy 374 

Achal Ram v. Kazim Husain 

Khan 134, 137 

Ackermann v. Ehrensperger 443 

Adaikkalam Chetti r.iMarimuthu 235 

Adamson r. Jarvis 231 

Addison v. Gandasequi 597 

Administrator-General of Bengal 

r. Juggeswar Roy 161 

Advocate-General of Bengal v. 

Ranee Surnomoye Dossee ... 2 

Agace, EJR parte 635 

Agacio r. Forbes 587 

Aga Gulam Husain r. A. D. 

Sasoon 233,236 

Aghore Nauth Bannerjee r. The 

Calcutta Tramways Co.... 176, 198 

Agius r. G. W. Colliery Co '308, 

313, 441, 479 
Agnew v. Indian Carrying Co.... 557 

Agra Bank v. Hamlin 35 

Agra Bank's Claim 505 

Agra and Masterman's Bank, Re, 

Ex parte Asiatic Banking 

Corporation 46 

Agricultural Cattle Insurance Co. 

v. Fitzgerald 268 

Ahinsa Bibi v, Abdul Kader...233, 234 
Ahmedabad Jubilee S. and W. 

Co. r. Chhotalal 157, 158 

Ahmedabad Municipality r. Sule- 

manji 283 

Ahmedbhai r. Framji 631 

Ahmedbhoy Hubibhoy v. Vullee- 

bhoy Cassumbhoy 135 



PAGE 

Ah Shain Shoke r. Moothia 

Chetty 42 

Airey v. Borham 643 

Ajudhia Prasad r. Bakar Sajjad 288, 

298 

v. Lalman 182 

Alagappa Chetti r. Vellian Chetti 233 
Alamai v. Positive Government 

Security Life Assurance Co. 181, 
193 

Aldridge r. Johnson 344, 362, 368 

Alice Mary Hill c. Clark 127, 

128, 144, 146, 157 

Ali Saheb r. Shabji 7 

Alia Baksh r. Chunia 126 

Allcard v. Skinner 75, 77, 87 

v . Walker 109 

Alliance Bank r. Brown 22 

Allkins r. Jupe 576 

Allumuddy v. Brahan 522 

Ambler v. Bolton 641 

Amir Chand v. Ram 141 

Amir Khan v. Amir Jan 131 

Amir Khan v. Saif Ali 279 

Anant r. Gopal 645 

Anant Das v. Ashburner & Co... 174 

Anant Ram v. Channu Lai 620 

Ancona v. Marks 539 

r. Rogers 377 

Anderson v. Morice 370 

v. Sanderson 607 

Andrews v. Belfield 197 

- v. Ramsey 569 

Anglo-Egyptian Navigation Co. 

v. Rennie 357 

Angus v. Maclachlan 573 

Annaji Rou v. Ragubai 7 

Annamalai Chetty r. Veerabad- 

ram Chetty 330, 331, 332 

Annoda Mohun Rai t: Bhuban 

Mohini Debi 68,81 

Annoda Persad v. Dwarkanath 557 

Antrobus v. Wickens 568 

Anupchand Hemchand v. 

Champsi Ugerchand 190 

Appa Pillai r. Ranga Pillai 155 

Appa Rao r. Suryaprakasa Rao 158, 

159 
Appa Rau r. Suryanarayana ... 332 

Appleby v. Myers 279, 284 

Argos, Cargo ex 499 

Arjan Bibi v. Asgar Ali. ..330, 336, 337 
Arkansas Smelting Co. v. Belden 

Co 206 

Arlapa Nayak r. Narsi Keshavji 580 



XXX 



TABLE OP CASES. 



PAGE 

Anuitage r. Insole 239 

Armstrong r. Stokes 588, 594 

Arthur r. Barton 529, 5:50 

Arulu Mastry r. Wakuthu Chiu- 

nayen 330 

Arunachellam Chetti r. Subra- 

manain Chetti 442 

Aryodaya S. & W. Co. r. Javal- 

prasad 42 

Asa Singh r. Sadda Singh 123 

Asan Kani r. Somasundaram... 636 
Ashgar Ali /. Delroos Banco 

Begum 81 

Asiatic Banking Corporation, EJS 
2>arte, Re Agra and Master- 
man's Bank 4(5 

Atkinson r. Bell 355 

r. Cotes worth 592 

Atkyns r. Amber 592 

Atlantic Mutual Insurance Co. 

V. Huth 531 

Atmaram r. Hunar 286 

: r. Umedram 267 

Atool Chandra Mukerjee v. 

Shoshee Bhusan 508 

Attorneys and Solicitors Act, He. 133 

Attwood r. Munnings 525 

Atwood r. Maude 647 

Auchterlonie r. Charles Bill 171 

August, The 529 

Austin v. Manchester, etc., Ry. Co. 557 

Australasia, Bank of, v. Breillat 634 
Australasian Steam Navigation 

Co. v. Morse 531, 532 

Australia, The 530 

Ayerst v. Jenkins 115 

Azemar r. Casella 419, 426 

BABCOCK /.-. Lawson 510 

Babshetti v. Venkataramana 106 

Babu Ram v. Ram Dayal 544 

Bachubai v. Shamji 641, 646 

Backhouse r. Hall 651 

Badeley r. Consolidated Bank 479, 621 
Badr-un-nisa v. Muhammad Jan 300 

Bagueley v. Hawley 421 

Baid Nath Das r. Shamanand 

Das 330, 332 

Baij Nath Singh r. Shah Ali 

Hosain 330. 334 

Bai Kesserbai r. Narranji 508 

Bailey r. Culverwell 349 

Baillie's Case 69 

Baily v. De Crespigny 253 

Bain v. Fothergill 316, 317, 318 

Bainbridge r. Firmstone 161 

Baines r. Ewing 580 

Baird's Case 634 

Bai Somi v. Chokshi Ishvardas 449 

Bai Vijli r. Nansa Nagar 127, 146 

Baker r. Hedgecock 146 

Balaram r. Southern Maratha 

Ry. Co 490 

Baldeo v. Mul Chand 265 

Baldeo Parshad v. Miller 179 

Baldeo Sahai v. Jumma Kummar 140 
Balfour r. Sea Fire Assurance... 299 



PAGE 

Balkishan Das c. Madau Lai... 85, 104 
Balkishen Das r. Run Bahadur 

Singh 329 

Balkrishna /. Bank of Bengal 476, 477 

c. Municipality of 

Mahad 233 

Balkuraya r. Sankamma 335> 

Bama Sundari Dasi r. Adhar 

Chunder Sarkar 288, 298 

Bamford v. Shuttleworth (51(1 

Banda Ali r. Banspat Singh ...72, 152 
Bani Muncharam r. Regina 

Stanger Add. 

Bank of Australasia r. Breillat 634 
Bank of Bengal v. Fagan 521, 525, 602 

r. Macleod ...51(5, ~>-~> 

r. Vyabhoy 

'Gangji...l22, 147 
Bank of New South Wales r. 

O'Connor 510 

Bank of New South Wales r. 

Golburn Butter Factory ... 506 
Banka Behary Dass r. Raj 

Kumar Dass 280 

Banke Behari r. Sundar Lai 330 

334, 335 
Banku Behari Shaha v. Krishto 

Gobindo 67 

Bannatyne v. Mel ver 605 

Banner, Ex parte 367 

Bannerman v. White 93 

Banque Jacques - Cartier r. 

Banque d'epargne de Mon- 
treal 144 

Bansi Dhar r. Akhay Ram 259 

Bansidhar *\ Bu Ali Khan 335, 336, 337 
Banwari Das v. Muhammad 

Mashiat 330 

Barber, Ex parte, 638 

v. Meyerstein 400 



Barber Maran r. Ramana Goun- 

dan 215,234 

Bardwell r. Lydall 260, 445 

Baring r. Cowie 506, 527 

v. Stanton 563, 567 

Barker v. Windle 97 

Barnard r. Faber 420 

Barnes r. Youngs 645 

Barnett r. South London Tram- 
ways 608 

Barney, Jte 53(5 

Barr r. Gibson 428, 429 

Barrow r. Dyster 587 

Barry v Longmore 507 

Bar tlett r. Peutland 528 

v. Purnell 528 

Bartram r. Lloyd 609 

Barwick r. English Joint Stock 

Bank 605 

Basanta Kumar i: Kusum Kumar 508 

Basavayya r. Subbaravu 330 

Basdeo v. John Smidt 409 

Basiruddin Mullick r. Surja 

Kuma Naik 630 

Baskcomb r. Beckwith 100 

Bassu Kuar v. Dhum Singh 288 

Bateson /. Gosling 458 



TABLE OF CASES. 



XXXI 



PAGE 

Baumwoll Mauufaotur r. Furness 530 
Bawden r. London, etc., Asscc. 

Co 582 

Beal v. South Devon Ry. Co. ... 557 

Beall, EJ; parte -..571, 573 

Bean land, Doe d., v. Hirst 268 

Beasley r. Bignold 115 

Seattle v. Lord Ebury 598, 599 

Beaumont r. Boultbee 553 

r.Reeve 157,158 

Bechervaise -r. Lewis 473, 478 

Bechuanaland Exploration Co. 

f. London Trading Bank ... 8 

Beck v. Siddle 230 

Beckett r. Addy tnan 450 

Beckham r. Drake 204, 629 

Bchari Lai r. Habiba Bibi 81 

v. Parbhu Lai 575 

v. Ram Ghulara 213 

Behari Lall c. Jagodish Chunder 119 

Behn r. Burness 93,249 

Beier v. Chotalal Javerdas 53, 518, 554 

Beldon r. Campbell 529 

Bell r. Auldjo 528 

- r. Balls 528, 533 

Bellamy v. Debenham 42 

Bemola v. Mohun 620, 636 

Benares, Maharaja of, v. Har 

Narain Singh ; 260,443 

Bengal, Administrator-General 

of, v. Juggeswar Roy 161 

Bengal, Advocate-General, v. 

Ranee Surnomoye Dossee ... 2 
Bengal, Bank of, v. Fagan 521, 525, 602 

r. Macleod ...516, 525 

v. Vyabhoy 

Gangji 122, 147 
Bengal Coal Co. r. Homee Wadia 

& Co 35, 237 

Beni Madho Das v. Kaunsal 

Kishor Dhusar 194 

Benson r. Duncan 531 

Berridge r. Berridge 481 

Best r. Haji Muhammad 409 

Bethell v. Clark 397, 399 

Bettini r. Gye 218, 243 

Betts v. Gibbins 576 

Beulah Park Estate, Re 471 

Bevan v. Waters 503 

v. Webb 646, 649 

Bexhill r. Christie 553 

Bhaggu Lai v. De Gruyther 621 

Bhagtidas v. Oliver 658 

Bhagwan Das v. Bhajju Mai 122 

Bhagwandas Narotamdas v. 

Kanji Deoji 240, 555 

Bhagwat Dayal Singh v. Debi 

Dayal Sahu 133, 134, 137 

Bhikabhai r. Bai Bhuri 449 

Bhikanbhai r. Hiralal 118 

Bhima v. Ningappa 151 

Bhimbhat v. Yeshwantrao...83, 85, 162 
Bhishambhar Nath r. Fatch Lai 620 
Bhishambhar Nath r. Sheo 

Narain 620 

Bhiwa Mahadshet r. Shivaram 

Mahadshet 151, 155 



PAGE 

Bhojabhai f. Hayem Samuel 58 1 

Bhola Nath i: Fateh Singh 331 

r. Mul Chand ... 187, 566 

Bholi Baksh r. Gulia 126 

Bhut Nath Das r. Girish Chandra 658 
Bhuvanagiri Subbarayudu r. 

Maradugula Venkataratnam 123 
Bibee Solomon r. Abdool Azeez 106 
Bichook Nath r. Ram Lochun ... 326 

Bickerton v. Burrell 600 

Biddle v. Bond 501 

Biddomoye Dabee v. Sittaiam 415, 514 

Biederman v. Stone 574 

Biggs r. Gordon 567 

v. Lawrence 607 

Bilborough r. Holmes 262 

Billings r. The Uncovenanted 

Service Bank 160 

Biuda Knar r. Bhonda Das ...289, 297 
Bindubashini Dassi r. Harendra 

Lai Roy 289 

Binney v. Mutrie 642 

Bir Bhaddar r. Sarju Prasad ... 597 

Bird, Eseparte 610 

v. Brown 399, 543 

Birmingham Banking Co., Ex 

parte 533 

Bishan Chand r. Radha Kishan 

Das 354 

Bisheshar Das v. Govind Ram... 119 

Bishop, Ex parte 574 

r. Countess of Jeysey . . . 630 

Blackburn i: Scholes 528, 544 

'(. Vigors 583 

Blackmore v. Bristol and Exeter 

Ry. Co 484,486 

Blackwell & Co. r. Jones & Co. ... 20 

Blades v. Free 551 

Blair v. Bromley 630 

Blakemore r. Bristol and Exeter 

Ry. Co 484,486 

Blenkinsop v. Clayton 354 

Bligh v. Davies 572 

Blisset r. Daniel 645 

Bloxam v. Handera 386 

Blumberg v. Life Interests, etc., 

Corporation 524 

Boistub Churn r. Wooma Chum 119 
Boja Sellappa Reddy v. Vridha- 

chala Reddy 292 

Bolton v. Lambert 539 

v. L. and Y. Ry. Co. 383, 394 

v. Salmon 455 

Bolye Chund Sing v. Moulard ... 215 
Bombay and Persia Steam Navi- 
gation Co. r. Rubattino Co. 256 

Bombay Sawmills Co., Re 506, 571 

Bombay United Merchants' Co. 

v. Doolubram 422, 427 

Bonar r. Macdonald 452 

Bond r. Gibson 632 

Sonita, The 531 

Bonner t\ Tottenham, etc., Build- 
ing Society 287, 288 

Bonnewell v. Jenkins 43 

Bonser v. Cox 453. 477 

Boorman v. Brown 527 



XXXll 



TABLE OF CASES. 



PAGE 

Boorman v. Nash 390 

Borriesr. Imperial Ottoman Bank 596 

Borrowman v. Free 221, 369 

Boseck& Co. r. Maudlestan 493 

Bostock v. Jardine 553 

Bostock & Co. v. Nicholson & Sons 

311, 433 

Boston Fishing Co. v. Ansell 609 

Boulton r. Jones 68, 294 

Bourne, Re 653 

Boursot r. Savage 583 

Bowen r. Owen 212 

Bowes, Re 505 

v. Shand 251 

Boyle Chund Sing v. Moulard ... 215 

Brabant & Co. r. King 487 

Bradburn r. G. W. By. Co 315 

Bradbury v. Morgan 450 

Bradford v. Williams 243 

Bradley r. Riches 583 

Brady r. Todd 523, 524 

Brahmaputra Tea Co., Ltd., r. 

Scarth 165, 166, 323 

Braithwaitet). Foreign Hardwood 

Co 435,437 

Bramwell r. Spiller 588 

Brandao r. Barnett 505, 506 

Brandon v. Scott 500 

Brandt v. Lawrence 213 

Brandt's Sons & Co. v. Dunlop 

Rubber Co., Ltd 373 

Branson v. Appasami 286, 298 

Braunstein v. Accidental Death 

Insurance 197 

Bray r. Chandler 568 

Bridges r. Garrett 484, 524 

Bright, Exparte 347, 519 

Brij Bhukhan v. Sami-ud-din 324, 330 
Brij Coomaree v. Salamander 

Fire Insurance Co 351 

Brinkman v. Abdul Ghafur 126 

Bristow r. Taylor 550 

British Columbia Sawmill Co. 

v. Nettleship 307, 607 

British Mutual Bank r. Charn- 

wood Forest Ry . Co 605 

British Waggon Co. v. Lea & Co. 224 

Broad v. Thomas 567 

Broad bent v. Led ward 500 

Brogden v. Metrop. Ry.Co....27, 43, 50 
Brohmo Dutt . Dharmo Das 

Ghose 275 

Brojendra Nath v. Sreemutty 

Luckey Money 78 

Brojendro Kumar Roy v. Rash 

Behari Roy 232 

Brook r. Hook 540 

Brooks r. Hassall 524 

Broom r. Hall 575 

Brown v. Andrew 519 

v. Arundell 608 

r. Byrne 9 

r. DeTastet 655 

v. Edgington 428 

K. Muller 306, 436 

-r Powell Duff rynCoal Co. 531 
v. Staton .... 529 



PAGE 

Bryans v. Nix 507, 570 

Bryant r. La Banque du Peuple 525 

i: Quebec Bank 602 

Buchanan v. Avdall 363, 408, 409 

v. Findlay 570 

Buldeo Doss v. Howe 252, 408 

Bulkley v. Wilford 95 

Bullen v. Sharp 615, 616 

Buller v. Harrison 610 

Bunarsee Dass v. Gholam 

Hoosein 635 

Bunney v. Poyntz 382, 383, 393 

Bura v. Mailia Shah 320 

Burchell . Wilde 641, 655 

Burden, Ex parte 341 

Burden r. Barkus 643 

Burgess A Burgess 618 

r. Eve 448 

Borgon r. Sharpe 531 

Burla Ranga Reddi r. Kalapalli 

Sithaya 173 

Borland r. Earle 562 

Burn v. Brown 507 

Burnard r. Haggis 494 

Boron r. Denman 540 

Butchart v. Dresser 654 

Byrne r. Reid 644 

r. Van Tienhoven 31 

CAHILL r. Dawson 537, 572 

Cahn v. Pockett's Bristol, etc., 

Co 395, 414 

Calder v. Dobell 586, 597 

Gal vert v. London Dock Co.... 467, 468 

Calye's Case 491 

Campanari v. Woodburn 551 

Campbell v. Hassel 527 

Canning r. Farquhar 42 

Cape Breton Co., Re 562 

Cargo ex Argots 499 

Carl ill v. Carbolic Smoke Ball 

Co 47, 181 

Carlisles, Nephews & Co. r. Rick- 

nauth Bucktearmull 168 

Carmichael r. Evans 645 

Carmichael's Case 545, 546 

Carr r. Jackson 590 

Garrison v. Rodrigues 526 

Carter, Re 572 

v. Agra Bank 179 

r. Wake 512 

v. Whalley 626 

Gary r. Webster 610 

Casey's Patents, Re 20 

Cassaboglou v. Gibbs 393, 518 

Castle V. Playford 370 

v. Sworder 379 

Catterall v. Hindle 512 

Caver. Cave 583 

Cawnpore, Collector of, r. Kedari 301 

Cella, The 573 

Chabildas Lalloobhai r. Dayal 

Mowji 581 

Chadma Lai r. Kishen Lai 122 

Chait Ram v. Mussammat Nathi 124 

Chalamayya v. Veradayya 620 

Chalmers, Ex parte 223, 389, 390 



TABLE OF CASES. 



XXX111 



PAP,E 

Chamberlain v. Williamson 204 

Chambers v. Gold thorpe 176 

Champernown v. Scott 508 

Champsey v. Gill & Co 186 

Chandra Mai v. Gonda Singh ... 504 

Chandraprasad v. Varajlal 159 

Chandulal Suklal v. Sidhruthrai 

Soojanrai 192, 555 

Chanter v. Hopkins 419, 429 

Chapman v. Withers 351, 353 

Charlesworth v. Mac Donald 166 

Charter v. Trevelyan 559 

Chartered Bank of India, etc. v. 

Henderson 403 

Chase r. West more 504 

Chairing r. Whitchurch 86 

Chatur Jagsi v. Tulsi 159 

Chedambara Chetty v. Renja 

Krishna Muthu 85, 133 

Chedi Lai r. Bhagwan Das 296 

Ched worth v. Edwards 557 

Chekkar. Gajiila 187, 575 

Chelapathi v. Surayya 553 

Chenvirappa r. Puttappa 280 

Cherukomen v. Ismala 124 

Chhitar Mai v. Jagan Nath 

Prasad 58 

Chidambaram Chetti r. Pickappa 

Chetti 558 

Chidambaram Chettiar r. Tinne- 

velly Sugar Mills Co 573 

Chimman Singh r. Subran Kuar 122 

Chinna r. Pedda 324, 336 

Chinnaramanuja Ayyangar v. 

Padmanabha Pillaiyan 215, 

591, 636 
Chinnasamy r. Rathnasabapathy 289 

Chinnaya v. Ramayya 17, 18, 19 

Chinnock v. Marchioness of Ely 41 
Choutmull v. Rivers Steam 

Navigation Co 491 

Chowksi Himutlal c. Chowksi 

Achrutlal 159 

Christacharlu v. Karibasayya 269, 270 

Chuhar Mai r. Mir 335 

Chummun Khan v. Mody 516 

Chundee Churn v. Eduljee 656 

Chunder Gaunt Mookerjee v. 

Jodoonath Khan 211 

Chunia r. Kundan Lai 288 

Chunni Kuar v. Rup Singh ...84, 104, 

135 
Citizens' Life Assurance Co. v. 

Brown 605, 606, 631, 632 

City Discount Co. v. McLean 258, 259 
Civil Service Co-operative Society 

v. General Steam Navigation 

Co 284 

Clack v. Wood 567 

Claridge r. South Staffordshire 

Tramway Co 493 

Clark v. Leach 648 

Clarke v. Bisley 465 

v. Dickson 277 

i: Hutchins 381 

- v. Spence 356 

v. Tipping 559 

I.C. 



PAGE 

Clarke v. Watson 197 

Clayv. Yates 346 

Clayton's Case 258, 630 

Clegg r. Edmondson 650 

Clements v. Norris 644 

Clerk v. Laurie 545, 546 

Clifford v. Timms 645 

Clive Jute Mills Co. v, Ebrahim 

Arab 362, 409 

Close v. Close 458 

Clough v. L. and N.-W. Ry. Co. 90, 

277 
Cobequid Marine Insurance Co. 

v. Barteaux , 531 

Cochrane c. Moore 349 

. v. Willis 105 

Cockran r. Irlam 527, 528, 533 

Coggs v. Bernard 484, 487 

Cohen v. Cassim Nana 306 

v. Sutherland . . 44 



Cole v. North- Western Bank.. .413, 414 

Coles v. Pack 443,447 

v. Trecothick 533 

Collector of Cawnpore v. Kedari 301 
Collector of Masulipatam v. 

Cavaly Vencata 540 

Collen v. Wright 598 

Collins r. Barker 659 

v. Evans .. , 576 



Colonial Bank v. Cady 610 

v. Exchange Bank 588 



Colvin v. Hartwell 507 

v. Newberry 530 

Commercial Bank of Tasmania 

v. Jones 262, 458 

Conquest v. Ebbetts 318 

Consolidated Co. v. Curtis & Son 587 

Const v. Harris 644, 659 

Cook v. Collingridge 641 

Cooke v. Addison 495 

v. Eshelby 597 

v. Oxley 34 

v.Wilson 587 

Coope v, Twynam 481 

Cooper, Exparte 382, 396 

v.Joel 442 

v. London and Brighton 

Ry. Co 339 

t-. Phibbs 110 

- v. Willomatt 494 

Cooverji v. Bhimji 176 

Coppin r. Walker 592 

Corbett, Ex parte 617 

Coringa Oil Co., Ltd. r. Koegler 173, 

176 

Cornfootv. Fowke 606 

Cornwall v. Henson 435 

Cort v. Ambcrgate Ry. Co 435 

Cory Brothers & Co. v. Owners of 

the Mecca 259 

Costa Rica Ry. Co. v. Forwood 561 

Coulthart v. Clementson 450 

Coupe" Co. r. Maddick 492 

Court v. Berlin 629 

Couturier v. Hastie 105, 519 

Coventry v. Barclay 638 

Cowan v. Milbourn... 115 



XXXIV 



TABLE OF CASES. 



Cowasjee v. Lallbhoy 647 

r. Thompson 392 

Cowell . Simpson 508, 573 

Cox r. Bishop Cotton's Schools, 

Governors of 10 

v. Bruce 531 

. Hickman ...615,616,621,622 

r. Prentice 610 

v. Willoughby 648 

Cragoe v. Jones 458 

Crawley r. Luchmee Ram 175 

Crawshay r. Collins 655 

Craythorne v. Swinburne 470, 473, 

481 

Creet . Seth 455 

Cropper v. Cook 527 

Croydon Gas Co. t. Dickinson... 454 
Cullianji Sangjibhoy -. Raghowji 

Vigpal 565 

Cumber *>. Wane 272 

Cundy v. Lindsay 69, 89 

Cunliffe v. Blackburn Building 

Society 571 

v. Harrison 435 

Cunningham & Co., Re 633 

Curl Brothers v. Webster 641 

Currie v. Rennick 95, 102 

Curtice v. London City and Mid- 
land Bank 38 

Curtis v. Williamson 597 

Curwen v. Milburn 573 

Cusack v. Robinson 388 

Cutter v. Powell 216, 567 

DADA v. Babaji 5 

Dadabhai v. Salleman 385 

Dadabhoy v. Pestonji 151 

Dady v. Madhuram 185 

Dagdu v, Bhana 66 

Dakhina Mohan Roy r. Saroda 

Mohan Roy 289 

Dalsukhram v. de Bretton 132 

Damodar v. Atmaram 516 

Damodar Das v. Muhammad 

Husain 463, 466 

v. Sheoram Das 560, 

562 
Damodara Mudaliar v. Secretary 

of State for India ...291, 295, 298 

Danby v. Coutts 525 

Daniels. Adams 529 

Danks, Ex parte 212 

D'Arcy v. Tamar Ry. Co 519 

Dargavarapu v. Rampratapu 265 

Darnley v. L. C. & D. Ry. Co. ... 264 

Dasaundi v. Iman-ud-Din 344 

Datoobhoy Hassum v. Vallu 

Mahomed 635 

Dattaram r. Vinayak 56. 57, 276 

Datubhai v. Abubaker 339 

Daula v. Gonda ^ 159 

Davenport r. Reg 258 

David and Matthews, Re 640, 641, 

655 

Davidson v. Cooper 266, 268 

v. Donaldson 597 

Davies, Ex parte 501 



PAGE 

Davies v. Burnett 345 

v. Humphreys 480 

v. London and Provincial 

Marine Insurance Co. 475 
Davis r. Cundasami Mudali ...273, 275 

v. Davis 640 

v. Hedges 432 

v. Howard 574 

r. Richardson 610 

Davlatsing v. Pandu 147 

Davy r. Scarth 660 

Da wood r. Vullubhdas 7 

Day v. Singleton 317, 318 

Dayabhai Dipchand t\ Dullabhram 

Dayaram 208, 
213 

v. Maniklal 

Vrijbhukan213, 245 
Dayabhai Tribhovandas v. Lakh- 

michand Panachand 181, 187, 

188, 279 

Dayal v. Khatav 658, 661 

Dean v. Macdowell 650 

Debendra Nath Dutt v. Adm.- 

Gen. of Bengal 107, 446. 475 

Debenham r. Mellon 521, 522, 523 

Debi Dfts v. Nirpat 235 

Debi Doyal Sahoo v. Thakurai 

Bhau Pertap 137 

Debi Prasad r. Rup Ram 118 

Debi Sahai v. Ganeshi Lai 187 

De Bussche v. Alt 533, 534, 53(5 

De Comas v. Prost 546, 547 

Degamber v. Kallynath 558 

De la Bere v. Pearson, Ltd. ...161, 309 
De la Chaumette v. Bank of 

England 571 

Delhasse, Ex parte 621 

Delhi and London Bank v. 

Hunter 476 

Deno Nath r. Nibaran Chandra 323, 
326, 327, 330 

Dent v. Bennett 75 

Oenton v. G. N. Ry. Co 46 

Denton's Estate, Re 481 

Deojit v. Pitambar 179 

Dering v. Earl of Winchilsea ... 480 

Derry v. Peek 92,94 

Desai Himatsingji r. Bhavabhai 288, 
296, 297 

Deslandes i: Gregory 586 

Devaynes v. Noble 652 

Devlatsing . Pandu 257 

Dhallu r. Jiwan Singh 135 

Dhanipal Das v. Maneshar 

Bakhsh Singh 85, 87, 104 

Dhan Mull v. Ram Chunder 59 

Dhanukdhari v. Nathima 144 

Dhiraj Kuarv. Bikramaj it Singh 128, 

157 

Dholidas v. Fulchand 140, 142 

Dhondbhat v. Atmaram 13 

Dhondiba r. Ramechandra 369 

Dhondu v, Narayan 6 

Dhuramsey v. Ahmedbhai 280 

Dibbins r. Dibbins 538 

Dicas v. Stockley 572 



TABLE OF CASES. 



XXXV 



PAGE 
Dick v. Dhunji Jaitha ...227, 228, 230 

Dickinson r. Dodds 37, 38 

r. Valpy 623 

Dilbar Sarkar r. Joysri Kurmi 323, 338 

Dingle r. Hare 527 

Dip Narain Eai v. Dipan Kai ... 332 

Dixon, Ex parte 627 

(-.Baldwin 395 

r. Clarke 211 

v. London Small Arms Co. 316 

v. Stansfield 507 

v. Winch 583 

- r. Yates 350, 383, 391, 400 

Dodson r. Downey 644 

Doe d. Beanland r. Hirst 268 

Dogdu v. Bhana 66 

Donald v. Suckling 494 

Doolubdass Pettamberdass v. 

Ramloll Thackoorseydass ... 180 
Dorab Ally f. Executors of Kha- 

jah Mohecoodeen 421 

Dorabji r. Muncherji 485 

Dorasinga v. Arunachalam 238 

Doshi Talakshi r. Shah LJjamsi Velsi 

182, 183, 185, 187, 191, 193, 194 

Douglas, lie 573 

Douglas Norman & Co., lie 508 

Dowlat Ram r. Jiwari Mai 512 

Downham r. Williams .; 585 

Dowse v. Gorton 652 

Dresser r. Noswood 581 

Drew v. Nunn 543 

Drinkwater r. Goodwin. ..507, 527,592 

Drummond r. Van Ingen 419, 424 

Dugdale r. Levering 438 

Dular Chand r. Balram Das 233 

Dulari r. A r allabhdas Pragji 140 

Dulichand r. Ramkishen Singh 301 

Dullabhdas v. Lakshmandas 326, 

334, 335 

Duncan r. Hill 574 

Duncan Fox & Co. v. North and 

South Wales Bank 471 

Dunmore, Countess of, r. Alex- 
ander 33 

Dunn r. Bucknall Bros 305 

v. Macdonald 599 

Dunne i\ English 562 

Durga r. Raghu 658, 661 

Durga Bakhsh Singh r. Mirza 

Muhammad Ali Beg 61 

Durga Prasad r. Baldeo 14, 157 

Durga Prasad Sureka r. Bhajan 

LallLohea 351 

Durham, Mayor of, v. Fowler ... 468 

Dutton v. Marsh 586 

v. Poole 16, 17, 18 

v. Solomonson 364, 380 

Dyer r. Hargi ave 100 

EAGLETON r. East India Ry. Co. 501 

East India Co. v. Oditchurn 175 

r. Tritton 611 

East Indian Ry. Co. r. Bunyad 

Ali... 490 

r. Kalidas 483 

Eastgate, lie, Ex parte Ward ... 436 



PAGE 

Eastwood v. Kenyon 158 

Edan v. Dudfield 380 

Ede v. Kauto Nath Shaw 265 

Edelstein r. Schuler & Co 8 

Edgar r. Fowler 548 

Edgington r. Fitzmaurice 90 

Edmunds r. Bushell 524, 601 

v _ Wallingford 287 

Edwards, EJC parte 572, 611 

t-. Brewer 392 

v. Havill 530 

v. Hodding 610 

Egerton r. Lord Brownlow 564 

Eichholz r. Bannister 421 

Elbinger Actien-Gesellschaft v. 

Armstrong 303 

Elbinger Actien-Gesellschaft v. 

Claye .- 588 

Eley v. Positive Government 

Security Life Insurance Co. 158 

Elias r. Govind 568 

Eliason v. Henshaw 44 

Ellen r.Topp 285 

Ellershaw . Magniac 365 

Elliott r. Crutchley 254, 284 

f. Thomas 383 

Ellis f. Emanuel 444 

v. Goulton 610 

r. Pond 574 

v. Thompson 607 

Elmore v. Stone 375 

Elphick v. Barnes 197, 351, 352 

Elphinstone, Lord, r. Monkland 

Iron and Coal Co 323 

Emmerson r. Heelis 437, 528 

Emmerton r. Matthews 422 

E m press c. Joggessur Mochi 344 

Empress Engineering Co., Re 538, 590 
Empress of India Cotton Mills 

Co. v. Naffer Chunder Roy 340 

Engell v. Fitch 310, 316, 317 

England v. Curling 638 

v. Davidson 152 

r. Marsden 287 

Esdaile f. La Nauze 526 

Eshahug Molla r. Abdul Bari 

Haldar 212 

Eshan Kishor v. Haris Chandra 123 
Eshoor Doss v. Venkatasubba 

Rau 182, 185, 191, 192 

Esposito r. Bowden 129 

Etwaria v. Chandra Nath 58 

European and Australian Royal 

Mail Co. r. Royal Mail Steam 

Packet Co 501 

European Bank, lie 610 

Evans v. Brembridge 477 

v. Coventry 659 

v. Edmonds 89 

Ewan v. Smith 418 

FAIRI.IE r. Fenton 586 

Fairf Ahmad r. King Emperor .. 416 
Fakirchand Lalchand r. Doolub 

Govindji 555 

Falckv. Williams 65. 70 

Fanny, The 531 

c 2 



XXXVI 



TABLE OF CASES. 



PAGE 

Farina v. Home 379, 405, 418 

Farquharson r. King 610 

Farrant v. Barnes 486 

Farrer r. Lacy 529 

Farrow v. Wilson 203 

Fateh Singh v. Sanwal Singh ... 121 
Fatesingji v. The Secretary of 

State for India 441 

Fatima v. Debnauth 55 

Fatima Khatoon v. Mahomed ... 300 

Fatmabai v. Pirbhai 234 

Fazal Husain v. Jiwan Ali 259 

Featherston r. Wilkinson 304 

Featherstonhaugh r. Fenwick 618, 649 

Feiser. Wray 392, 393 

Felthouse r. Bindley 27, 45 

Fenn v. Bittleston 494 

r. Harrison ..* 524 

Fenwick, Re 583 

Feretr. Hill 90 

Ferguson v. Um Chand Boid ... 526 

Ferrand v. Bischoffsheim 595 

Ferrers r. Robins 553 

Field r. Lelean 388 

Filby r. Hounsell 41 

Findon r. McLaren 608 

Fine Cotton Spinners', etc., Asso- 
ciation r. Harwood 619 

Fink r. Buldeo Dass 544 

Finlay v . Chirney 204 

Firbank v. Humphreys 599 

Fischem Kamala Naicker 133 

Fisher r. Apollinaris Co 131 

v. Bridges 116 

r. Cutbell 543 

r. Drewitt 568 

v. Marsh 587 

r. Smith 572 

Fitzherbeit j-. Mather 582 

Fitzroy Steel Co., He 583 

Fleming r. Bank of New Zealand 539 

r. Koegler 249 

Flemyng r. Hector 616 

Foakes v. Beer 272 

Forbes v. Jackson 472 

Ford r. Stier 70 

r. Titley 435 

Foreman r. Great Western Ry. Co. 520 

Forth v. Simpson 573 

Foster v. Dawber 272 

v. Mackinnon 65, 66 

Fowkes r. Manchester and Lon- 
don Assurance Association 63 

Fox v. Clifton 624 

Fragano r. Long 362 

Framji v. Hormasji 421 

r. McGregor 415 

Frampton, Ex parte 526 

Fraser & Co. v. Bombay Ice 

Manufacturing Co.. ..167, 168, 169 

Fray r. Voules : 527 

Frazer p. Jordan 465 

v. Marsh 530 

Freeman r. East India Co 531 

Freeth v. Burr... 21 7, 218, 244, 250, 435 

French v. Howie 597 

r. Styring 614 , 



PAGE 

Friend r. Young 652 

Frith r. Forbes 507 

r. Frith 545 

Frixione v, Tagliaf erro 575 

Frost v. Aylesbury Dairy Co. 423, 428 

v. Knight 221,435 

v. Oliver 530 

Fry r. Lane 79 

Fuentes r. Montis 401, 413 

Full wood v. Akerman 567 

Furnival r. Coombes 590 

Futteh Ali v. Gunganath Roy ... 291 

GABABRON v. Kreeft 355, 365, 368 

Gadd r. Houghton 586, 589 

Gadu Bibi r. Parsotam 635 

Gaetano and Maria, The 529 

Gandy i\ Gandy 20 

Ganesh r. Yishnu 86 

Ganesh Flour Mills Co. r. Puran 

Mai 538 

Ganesh Ramchandra v. G. I. P. 

Ry. Co 223 

Ganga Baksh r. Jagat Bahadur 

Singh 85 

Ganga Bishun Singh r. Mahomed 

Jan 

Ganga Dayal r. Bachchu Lai ... 
Ganga Prasad v. Ram Dayal ... 
Ganga Ram r. Chandan Singh... 



i. Devi Das 



258 
331 
158 
269, 
270 
138, 152 

Gangadas v. Jogendra 292 

Gangadhar r. Damodar 119 

Ganges Manufacturing Co., Ltd., 

v. Indra Chand 173 

Ganges Steam Car Co 597 

Ganpat r. Adarji 7 

r. Annaji 619.044 

Gardiner v. Gray 424, 425 

Gardner r. Baillie 526 

r. Walsh 266 

Garland v. Jacomb 638 

Garner r. Murray 642, 643 

Garth i: Howard 608 

Garwood's Trusts, In re 644 

Gaurinath Mookerjee v. Mad- 

humani Peshakar 126 

Gaussen r. Morton 545 

Geare v. Mare 116 

Geipel v. Smith 130 

General Billposti ng Co. v. Atkinson 218 
General Share Trust Co. r. Chap- 
man 508 

George r. Clagett 595 

George Whitechurch, Ltd., v. 

Cavanagh 68 

Geresh Chunder v. Bhuggobutty 81 

German Mining Co.'s Case 643 

Ghanshiam Singh v. Daulat 

Singh 319 

Gibbes, Ex parte 399 

Gibbon v. Pease 346 

Gibbs r. Grey 531 

Giblin v. McMullen 487, 557 

Gibson v. Carruthers 391 

r. Crick 568 



TABLE OF CASES. 



XXXV11 



PAGE 

Gibson r. May 570 

r. Winter 592 

Gidley r. Lord Palmerston 591 

Gieve, Re 182, 185, 186 

Giles r. Edwards 247 

Gillespie Brothers & Co. v. 

Cheney, Eggar & Co 429 

Gillett r. Thornton 648 

Gilman r. Elton 608 

Gilmour r. Supple 358 

Girdhari Lai r. Crawford 521 

Girijanund r. Sailajanund ...143, 151 
Girisli Chandra r. Kunja Behari 309 
Gii-raj Baksh v. Kazi Hamid AH 283 

Gladstone v. King 582 

Glassington r. Thwaites 650 

Gloucester Municipal Election 

Petition 36 

Gluckstein t. Barnes 562 

Glyn Mills Co. r. East and West 

India Dock Co 400 

Glynn v. Margetson 52 

Gnanabhai r. Srinivasa Pillai ... 125 
Gnanasainbanda Pandara San- 

nadhi . Vela Pandaram ... 143 
Gobardhan Das r. Jai Kishen 

Das 72, 79, 132 

Goberdhan Singh v. Ritu Roy ... 280 
Gobind Chunder r. Srigo-bind... 232 
Gobind Chunder Sein r. Ryan... 515 

Gobind Das r. Sarju Das Add. 

Gobind Prasad v. Chandar 

Sekhar 235 

Gocuklas i: Lakhmidas 136 

Goculdas Madhavje r. Narsu 

Yenkuji 255 

Godin v. London Assurance Co. 573 

Godts v. Rose 350. 367, 376 

Godwin r. Francis 599 

Gogun Chunder Ghose r. Dhuro- 

nidhur 267, 270 

Gokal Chund r. Khwaja Ali 336 

Golding, Davis & Co., Ex part e 401, 

402 
Golla Nagabhusanam v. Ka 

kala 658 

Gomez, Ex parte... 570 

Good, Ex parte 232, 467 

Goode K. Harrison 627,628 

Goodson v. Brooke 528 

r. Grierson 151 

Goodwin v. Robarts 603 

Gooroo Doss Dutt v. Ooma Churn 

Roy 260 

Gopal Daji v. Gopal Bin onu... 446 

Gopal Das v. Hari Das 590 

Gopal Ramchandra r. Gangaram 7, 

135 

Gopal Singh r. Bhawani Prasad 440, 

451 
Gopal Tukaram r. Sorabji Nusser- 

wanji 347 

Gopalrav r. Kallappa 119, 146 

Gopaludu v. Venkataratnam...326, 330 
Gordhanlal r. Darbar Shri Suraj- 

malji 296 

Gordon r. Street 103 



PAGE 

Gosling v. Gaskell 537, 616 

Gosvami Shri Purushotamji 

Maharaj r. Robb 120 

Gough r. Everard 377 

Gourchandra v. Protapchandra 464 
Gour Chandra Das r. Prasanna 

Kumar Chandra 267, 268 

Goverdhandas v. Bank of Bengal 473 

Govind v. Pacheco 129 

Govinda Kuar r. Lala Kishun 

Prosad 280 

Govindasami r. Kuppusami 267 

Govindasami Naidu v. Kuppu- 
sami Pillai 267 

Govindji r. Lakmidas 59 

Graff v. Evans 345 

Grafton r. Armitage 346 

Graham v. Campbell 309 

Grant r. Gold Exploration, etc., 
Syndicate of British 
Columbia 559,609 

r. Norway 531, 606 

i-. Secretary of State for 

India 591 

Grantham v. Hawley 372 

Gravely v. Barnard 161 

Gray i-. Gutteridge 610 

r. Haig 558 

v. Mathias 157 

v. Seckham 471 

Great Eastern, The 530, 603 

Great India Peninsula Ry. Co. 

v. Hammandas...399, 405, 412, 418 
Great Northern Ry. Co. v. Swaf- 

field 499 

r. Witham 35 

Greatrex v. Greatrex 646 

Great Western Insurance Co. v. 

Cunliffe 563 

Great Western Ry. Co. v. Willis 608 

Grdbert-Borgnis v. Nugent 313 

Green r. Bartlett 568 

r. Baverstock 437 

v. Briggs 614 

r. Hopke 589 

-. r. Lucas 568 

r. Mules 567 

v. Wynn 458 

Greenwood v. Francis 464 

v. Holquette 410, 414, 

415,464 
Grenon r. Lachmi Narain Augur- 

wala 240, 385 

Grice r. Ken rick 592 

r. Richardson 379, 388, 389 

Grimoldby r. Wells 433 

Grindley v. Barker 519 

Groom r. Cheese wright 573 

Grove r. Dubois 519 

Gubhoy v. Avetoom 590 

Guerreiro v. Peile 527 

Guild & Co. r. Conrad 441 

Gunn r. Bolckow, Vaughan & 

Co 387 

r. Roberts 530 

Gunput Narain Singh, Re 139 

Gurney r.Womersley 611 



XXXV111 



TABLE OF CASES. 



PAGE 
Gursami Chetti v. Samurti 

Chinna 227 

Gurusami r. Subbaraya 135 

Outline r. Armstrong 519 

Guyr. Churchill 133 

HADLET-I-. Baxcndale ...307, 311, 312, 

818 

Hagedorn r. Oliverson 539 

Hajarimal r. Krishnarav...444,456,459, 
460, 461, 465, 466 
Haji Abdul Rahman r. Haji 

Noor Mahomed 211 

Haji Abdul Rahman Allarakhia 
r. The Bombay and Persia 
Steam Navigation Co. ...108, 111, 
112 

Haji Ismail Sait r. The Company 
of the Messageries Maritimes 

of France 490 

Haji Mahomed v. Spinner 42, 45 

Hakma Manji r. Meman Ayab...6, 335 

Halbot r. Lens 599 

Haldane v. Johnson 240 

Haler. Hale 659, 660 

Halima Bee r. Roshan Bee 296 

Hall r. Capell 144 

r. Hall 659 

v. Warren 62 

Hallett's Estate, Re 261, 498 

Halliday r. Holgate 494 

Hambro r. Burnard 579, 602 

Hamburg, The 530 

Hamidoolla r. Faizunnissa 124 

Hamilton r. Watson 476 

Hamlyn r. Houston & Co 631 

r. Talisker Distillery ...10,131 

r.Wood 549 

Hammond r. Anderson... 359 

Hammond & Co. r. Bussey ...308, 313, 
441, 479 

Hammonds v. Barclay 507 

Hampden v. Walsh 181 

Hanmant r. Jayarao 55 

Hanson?'. Meyer 359 

Harburg India-rubber Comb Co. 

r. Martin 441 

Harding, Ex parte 478 

Hare and O'More's Contract, lie 547 
Harendra Lai Roy c. Uma 

Charan Ghosh 267 

Havgreave r. Spink 411 

Had r. Ramji 86, 331 

Haribhai Mancklal r. Sharafali 

Isabji 164. 166, 169 

Haridas r. Kalumull 409, 433 

Harilal v. Nagar 7 

Hari Lalu Patil v. Ramji Valad 

Pandu 86,331 

Hari Saran Maitra i: Jotindra 

Mohan Lahiri 231 

Harivalabhdas r. Bhai Jivanji...78, 135 
Harjiban Das r. Bhagwan Das... 452 

Harmanr. Johnson 630 

Harmer r. Cornelius 556 

Harrington v. Victoria Dock Co. 609 
Harris r. Nickerson . 47 



PAGE 

Harrison v. Delhi & London Bank 63 
r. Luke 344 



Harriss r. Fawcett 450 

Hartas r. Ribbons 575 

Hartley v. Ponsonby 152 

Harvey r. Johnston 48 

Hasha r. Ragho 657 

Hash mat Ali r. Lachmi Narain 657 

Haslam, lie 562 

Hasonbhoy r. Clapham 589, 598 

Hastelow r. Jackson 548 

Hathesing r. Laing 572 

Hawtayne v. Bourne 532, 633 

Hay r. Goldsmidt 526 

Hayman, Ex parte 625 

Hazard r. Treadwell '... 603 

Hazari v. Chunni Lai 459, 461, 466, 469 

Head, Re 263, 629 

r. Diggon 34 

r. Tattersall 352, 353 



Heald r. Kenworthy 594 

Heath v. Chilton 566 

r. Sansom 626,654 



Heatley r. Newton 587 

Heera Lall r. Dhunput Singh ... 160 

Heffield r. Meadows 447 

Heilbutt r. Hickson 424, 430, 432 

Helme v. Smith 614 

Hemendro Coomar Mullick r. 

Rajendrolall Moonshee 227 

Hem Raj r. Khuda Bakhsh 86 

Henderson r. Barnewell 528, 533 

v. Stevenson 28 

Henderson & Co. r. Williams ... 501 

Henkel r. Pape 65 

Henthorn v. Fraser 31, 32 

Hermann r. Charlesworth 138 

Het Narain r. Ram Deni 7 

Het Ram r. Debi Prasad 443 

Heyworth r. Hutchinson 431 

Hibblewhite r. McMorine 374 

Hickman r. Berens 106 

Higgins r. Senior 586 

Hill r. Clark.. ..127, 128, 144, 146, 157 

Hilton v. Eckersley 170, 171 

r. Tucker 378, 409 



Hinde v. Liddell 303 

r. Whitehouse..., , 359 



Hindley's Case 39 

Mine r. S. S. Ins. Syndicate.. .524, 528 

Hingani Lai r. Mansa Ram 283 

Hippisley r. Knee 569 

Hira r. Bhandari 141 

Hirada Karibassappah r. Gadiga 

Muddappa 261 

Hoadly r. McLaine 374 

Hoare r. Parker 516 

r. Rennie 435 

Hobson r. Bass 445 

Hochster r. Dela Tour ...220, 221, 222, 

435 
Hodges r. Delhi and London 

Bank 82,464 

Hodgson r. Loy 392 

Hog? r. Snaith 526 

Holding r. Elliott 586 

Holland r. Russell .. ,610 



TABLE OF CASES. 



XXXIX 



PA a n 

Hollis v. Claridge 571 

Holme i: Brunskill 455, 456 

v. Guppy 247 

r. Hammond 616 

Holt r. Ely 588 

Honck r. Muller 244, 435, 637 

Honda Mai v. Muhammad Baksh 327 

Honeyman r. Marryatt 41 

Hooper v. Keay 261 

Hope, The 565 

Hormasji v. Mankuvarbai 583 

- r. Pestanji 119 

Hornby r. Lacy 519 

Home r. Midland By. Co 313 

Horsfallt'. Thomas 102 

Hosein Shah v. Nur Ahmed 131 

Hoti Lai r. Mu Sammat 81 

Hough r. Manzanos 586, 590 

Houghton v. Matthews 507, 527 

Houldsworth v. City of Glasgow 

Bank 605 

Houlton's Case 652 

Household Fire, etc., Insurance 

Co. v. Grant 32, 33 

Hovenden v. Millhoff 609 

How v. Kirchner 573 

Howard v. Baillie 526 

c. Lovegrove.... 441 

v. Sheward 524 

Howatson r. Webb 66 

Howe?;. Smith 353 

Howell v. Coupland 253 

Howgate and Osborne's Contract 266 

Hubbard, Ex -parts 509 

Hubbersty r. Ward 531 

Huddersfield Banking Co. v. 

Lister & Co 106 

Hudson v. Buck 44 

Hughes r. Greame 600 

Huguenin v. Baseley 76, 470 

Hulme r. Coles 463 

Humble v. Hunter 206, 601 

Humfrey v. Dale 9 

Hunsraj Morarji v. Nathoo 

Gangaram 207 

Hurmukhrai r. Narotamdass 182,185, 
186,191 

Hurrinath r. Krishna 558 

Hurruck Chand r. Gobind Lai 

Khetry 631 

Hurry r. Mangles 375 

Husain Bakhsh r. Rabmit 

Husain 84, 135 

Husaini Begam r. Khwaja 

Muhammad Khan 19 

Hussey r. Christie 530 

r. Horne-Payne 41, 42, 44 

Hutcheson r. Eaton 586 

Hutchins r. Scott 268 

Hutley i: Hutley 133 

Button v. Bullock 588 

Hyder Ali v. Elahee Bux 614 

Hydraulic Engineering Co. r. 

McHaffie 251, 307, 313 

Hyman v. Nye 486 

IBRAHIMBHAI r. Fletcher . . 354 



PAGE 

Ichha Dhanji r. Natha 485 

Imam-ud-din v. Liladhar 234 

Imperial Bank v. London and St. 

Katherine's Docks Co. ...386, 394, 
469 
Imperial Banking and Trading 

Co. v. Atmaram Madhavji 244 

r. Pranjivandas Harji- 

vandas 244, 245 

Imperial Loan Co. r. Stone 59 

Inayutullah v. Rani 445 

Inchbald v. Western Neilgherry 

Coffee, etc., Co 550, 568 

Inchmaree, The 529 

Indar r. Khushli 122 

Indar Singh r. Narindar Singh 5<> 
Inder Pershad Singh v. Campbell 255 
India, The Secretary of State for, 

v. Abdul Kahim 320 

r. Arathoon 197 

v. Fernandes 293 

v. Kamachee Boye 539, 540 

v. Nilamekam 476 

v. Sheo Singh 484 

v. Sheth Jeshingbhai 106 

Indian Chief, The 2 

Indrau Ramaswami v. Anthappa 

Chettiar 56, 149,157 

Ireland v. Livingstone 518, 523 

v. Thomson 530 

Irish, Re 660 

Irrawaddy Flotilla Co. v. Bug- 

wandas I, 6, 8, 488, 489 

Irvine r. Union Bank of Aus- 
tralia 538, 539 

v. Watson 594 

Isaack r. Clark 502 

Isherwood v. Whitmore 214 

Ishur Chunder r. Jibun Kumari 485 

Ismal v. Daudbhai 197 

Ismail Mussajee r. Hafix Boo ...79, 82 
Iveson r. Conington 585 

JACKSON r. Cummins 504 

Jacobs v. Latour 573 

v. Morris 525 

Jadobram v. Bulloram 642 

Jadu Nath Poddar r. Rup Lai 

Poddar 280 

Jafar Ali r. Ahmed Ali 154 

Jaffer Meher Ali r. Budge-Budge 

Jute Mills Co.. ..114, 122,206,207, 

209, 390 

Jafferbhoy r. Charles worth ...506, 547 

Jagabhai v. Rustomji 546 

Jagadindra Nath -v. Chandra 

Nath 150 

Jaganadham i: Ragunadha 326 

Jagannathdas v. Ramdas 526, 527 

Jagapati r. Ekambara 527 

Jagat Chunder v. Iswar Chunder 647 
Jaggannath r. Secretary of State 69 

Jag Lai v. Shib Lai 230 

Jagmohundas r. Nusserwanji ... 304 

Jaikissondas r. Zenabai 660 

Jai Kumar r. Gauri Nath 133 

Jalim Singh v. Secretary of State 491 



xl 



TABLE OF CASKS. 



Jambu llamaswamy r. Sundaraja 461 

James v. Griffin 394, 395 

Jamsitji v. Kashinath 58 

Jang Bahadur v. Shankar Rai ... 526 

Janki Das v. Ahmad Husain 331 

Janki Prasad Singh v. Baldeo 

Prasad 288,296 

Janson r. Driefontein Consoli- 
dated Mines 129, 130 

Jaques v. Millar 308, 316 

Jarao Kumari v. Basanta Kumar 

Roy 294,296 

Javali Ramasami r. Satham- 

bakam 657 

Jebsen v. East and West India 

Dock Co 315 

Jefferys r. Agra Bank 506 

Jenkins r. Bethan 557 

r. Hutchinson 585 

Jenkyns r. Usborne 393 

Jenner r. Smith 362, 363 

Jennings i: Jennings 640 

r. Rundall 59 

Jhinguri r. Durga 122 

Jivray Megji v. Poulton 245 

Jiwan Vurjung r. Haji Osmaii 207, 

390 
Jogendra Mohan Sen r. Uma 

Nath Guha 258 

Jogesh Chunder Dutt r. Kali 

Churn Dutt 301 

Jogo Mohen Deb r. Davdoong 

Burman 126 

Johnson r. Credit Lyonnais 413 

r. Crowe 97 

r. Raylton 427 

Johnston r. Boyes ....46, 437 

Johnstone r. Marks 58 

Jones r. Arthur 215 

v. Barkley 243 

v. Bowden 91, 421 

r. Bright 427 

r. Daniel 41 

v. Gardiner 317 

v. Just 423, 426, 427, 

428, 432 

r. Littledale 585 

v. Marshall 511 

r. Merionethshire Building 

Society 72,130 

r. Peppercorn 571 

r. St. John's College 340 

Jonmenjoy Coondoo r. Watson 515, 

525 
Joravermal Si vial r. Dadabhai 

Keramji 187 

Jordon v. Ram Chandra Gupta... 568 

Josephs. Solano 146 

Joshi Kalidas v. Koli Dada 341 

Josling r. Kingsford 425 

Jowala Nath v. Rupa 233 

Joyce v. Swaiin 367, 374 

Joykisto r. Nittyanund 628 

Joyner r. Weeks 315,319 

Jugdeo Narain Singh v. Rajah 

Singh 300 

Juggeewundas r. Ramdas 636 



PAGE 
Juggernath Augurwallah v. 

Smith 363, 418 

Juggernauth Sew Bux r. Ram 

Dyal 190, 194, 213 

Juggessur v. Panchcowree 139 

Juggomohun Ghose r. Kaisree- 

chund 51 

v. Manick- 

chund 9, 51 

Juggut Chunder r. Rada Nath ...644, 

657 

Jyarii Begam r. Umrav Begam... 296 
Jyoti Kumar r. Hari Das 123 

KAHN v. Alii Mahomed 660 

Kalachand Kyal c. Shib Chunder 327, 

330 

Kalidas r. Nathu Bhagvan ...233, 234 
Kaliprasad Tewari v. Rnga Sahib 

Prahlad Sen 154 

Kali Prasanna r. Ambica Charan 464 
Kamakshi Achari v. Appavu 

Pillai 195 

Kamala Kant Ghose v. Kalu 

Mahomed 120 

Kamalammal r. Peeru Meera 

Levvai Rowthen 319 

Kamini v. Kaliprossunno Ghose 84 
Kamisetti Subbiah v. Katha Ven- 

katasawmy 31 

Kamta Prasad v. Sheo Gopal Lai 56, 

57, 276 

Kandhiya Lai r. Chandar 233 

Kanhaya Lai r. Narain Das 336 

Kanji v. Bhagwandas 240 

Kanshi Ram v. Secretary of State 

for India 344 

Kanthu Punja v. Vittamrna 236 

Kan war Ranzar v. Hebbert 589 

Karamali r. Narain Singh 267 

Karampalli r. Thekku Vittil ... 274 
Karim Bakhsh r. Bithul Das ... 445 

A'ttrtifik, The 529 

Kashiba v. Shripat ...54, 55, 445, 463 
Kashi Prasad r. Kedar Nath Sahu 122 
Kashy Nath Roy v. Surbanand 

Shaha 267 

Kassa Mai v. Gopi 658 

Kathama Natchiar r. Dorasingu 182 

Kaufman r. Gerson 131 

Kay v. Groves 447 

Keay v. Fenwick 542 

Kedaii Bin Ranu v. Atmaram- 

bhat 84, 162 

Kedannal Bhuramal v. Surajmal 

Govindram 240, 555, 565 

Kedar Nath v. Gorie Mahomed 15 
Keighley, Maxted &; Co. r. 

Durant 538 

Keir i: Leeman 130 

Kellock v. Enthoven 439 

Kelner r. Baxter 538, 591 

Kemble v. Farren... 322, 323, 406, 407 
Kemp r. Falk...382, 390,401, 402, 404 

Kendal r. Wood 637 

Kendall r. Hamilton ...226, 228, 230, 

628 



TABLE OF CASES. 



xli 



PAGE 

Kennedy r. Gouveia 586 

v. Panama Mail Co. ... 106 

Kensington r. Inglis 588 

Kesarichand v. Merwanjee ...182, 192 

Keshav v. Rayapa 642, 658 

Kessowji v. Hurjivan 80, 132 

Khairat Husain r. Haidri Begam 296 
Khairunnessa Bibi r. Loth Nath 58 
Kharag Singh r. Bhola Nath ... 326 

Khatun Bibi r. Abdullah 455 

Khozan Sing T. The Secretary of 

State 300 

Khubchand r. Beram 127 

Khurram Singh r. Bhawani 

Bakhsh 326 

Khushalchand r. Ibrahim 6 

Khushal Singh r. Khawani ...288, 290 

Kiam-ud-din r. Rajoo 264, 265 

KidarNath v. Ajudhia 286 

Kidderminster?-. Hardwick 543 

Kingr. Gillett 272 

- v. Hoare 227, 228, 229 

Kingsman r. Kingsman 501 

Kingston, Ex parte 571 

Kingston r. Preston 243 

Kingston-upon-Hull v. Harding 468 

Kin lock r. Craig 507 

Kirk r. Bell 519 

Kirkham i: A tten borough' 351,352 

Kirkpatrick, Re .509 

Kirkstall Brewery r. Furriess 

Railway Co 607 

Kirpa Ram v. Sami-ud-din 84 

Kirtee Chunder v. Struthers 232 

Kirti Chunder Chatterji v. Atkin- 
son 86.331 

Kishari Lai v. Mogh Singh 293 

Kishen Sahai -c. Bakhtawar Singh 302 
Kistnasammy Pillay r. The 
Municipal Commissioners 
for the Town of Madras... 174 
Klein wort c. Cossa Marittima 

Genoa 530 

Knight r. Majoribanks 78 

Knights i: W iff en 390 

Knox v. Gye 65(5, 661 

Koeglerr.TheCoringaOilCo.,Ltd. 175 

Koudayya r. Narasimhulu 547 

Kondeti Kama Row r. Nukamma 280 
Kong Yee Lone & Co. v. Lowjee 

Nanjee 1.82, 13, 185, 192 

Koomud Chunder Dass v. Chun- 
der Kant Mookerjee 177 

Koylash Chunder r. Tariney 

Churn 43 

Kreel r. Henry 199, 253, 251 

Krishna r. Krishiiasami...591, 592, 620 
Krishna Kumar r. Brojo Nath 

Roy 336 

Krishna Ram r. Rakmimi Sewak 

Singh 231 

Krishnan v. Sankara Varma 280 

Krishnappa Chetti r. Adimula 

Mudali 121 

Krishnaravr. Manaji 215 

Krishno Kamini Chowdhraui v. 

Gopi Mohun 288 



PAGE 
Krishto Kishori Chowdhrain v. 

Radha Romun 459,461, 466 

Kristodhone Ghose r. Brojo 

Gobindo Roy 146 

Kruger r. Wilcox 572 

Kundan Bibi v. Sree Narayan... 56 

Kundan Lai v. Nathu 141 

r. Secretary of State 

for India 35 

Kunhan v. Bank of Madras 505 

Kunja Behari Singha v. Bhupen- 

dra Kumar Dutt 301 

Kunjbeharilal r. Ilahi Bakhsh... 335 

Kunwar Ram Lai r. Nil Kanth 134, 

135, 137 

Kuppa Gurukal r. Dora Sami ... 143 
Kuppusami Naidu v. Smith & 

Co 176 

Kuttayan Chetty r. Palaniappa 

Chctty 350 

Kuvarji i: Moti Haridas 276 

Kuverji ?. Great Indian Penin- 
sular Railway Co 8, 488 

LA BANQUK v. La Banque 144 

La Banque Jacques Cartier r. 

La Banque d'Epargne, etc. 541 

Lacey, Ex parte 560 

Lachman r. Bapu 445 

Lachman Das r. Chater 341 

Lachmi Dai M oh u tain v. Kissen 

Lai 39 

Lachmi Narain i: Fatah Bahadur 10, 60 

r. Vernon 316 

Lacy r. Hill 574 

Ladhu v. S. P. & D. Railway ... 491 
Lady well Mining Co. v. Brookes 562 
Lagunas Nitrate Co. v. Lagunas 

Syndicate 557 

Laidlaw v. Organ 91,93 

Laidler r. Burlinson 354, 357 

Laingv. Barclay, Curie & Co.... 356, 357 

Lakeman r. Mountstephen 585 

Lakhmi Das r. Babu Megh 493 

Lakhmichand r. Chotooram...546, 547 
Lakoran Skeikh Nabbi r. Madar 

Baksh 124 

Lakshmana Ayyan r. Ranga- 

sami Ayyan 232 

Lakshmi Doss r. Roop Loll... 79, 87, 88 
Lakshminarayana c. Subhadri 

Ammal 128,157 

Lakshmishankar r. Motiram 590 

Lakshumandas r. Lane 593 

Laksmishankar r. Vishnuram ... 228, 

229 

Lala Banshidhar c. The Govern- 
ment of Bengal 263,447 

Lai Achal Ram r. Raja Karim 

Husain Khan 137 

Lalbhai r. Kavasji 658 

Lalchand Balkissan i: Kersten 239 

Lalli v. Ram Prasad 84 

Lai Saha v. Monmohan Gossami 267 

Lambton, Ex parte 356 

Lamond r. Davall 409 

Lampleigh r. Brathwait...21, 295, 440 



xlii 



TABLE OF CASES. 



PAGE 

Lang r. Smyth 610 

Langhorn r. Allnutt 608 

Langmead's Trustees, Be 653 

Langton r. Higgins 362 

Lanyon r. Toogoocl 369 

Lara r. Hill 568 

Laugher r. Pointer 605 

Law r. Law 649 

- v. Redciitch Local Board ... 340 
Lawless r. Calcutta Landing and 

Shipping Co 557 

Lawrence, lie 573 

LaxniHmlal r. Mulshankar 147 

Laxumibai r. Ganesh Raghunath 159 

Leask r. Martin 505 

v. Scott 403 

Le Blanche r. L. & N. W. Ry. 

Co 314 

Leer. Griffin 344, 345 

r. Jones 475, 476 

r. Walker 556 

Leeds Banking Co., He 533 

Leeds, etc., Theatre of Varieties 562 

Leete r. Leete 570 

Le Geyt r. Harvey 386, 415, 418 

Leigh r. Paterson 220, 306 

Lennard r. Robinson 586 

Levy v. Barnard 572 

r. Green 433, 434 

r. Walker 618, 640 

Lewis f. Brass 43 

(-.Nicholson 585 

r. Read 541 

r. Samuel 574 

Liles r. Terry 77, 78 

Lilladhar r. George Wreford 399, 400 

Lilley r. Doubleday 552 

Linck v. Jameson 528 

Lishman v. Christie 531, 607 

Lister & Co. r. Stubbs 561 

Litt r. Cowley 399 

Liverpool Household Stores, Re 519 

Livingstone r. Ross 519 

Llanelly Ry. & Dock Co. r. 

L. &N. W. Ry. Co 38 

Llewellin, Be 571 

Lloyd r. Guibert 10, 529 

Lloyds r. Harper 448 

Lock r. Furze 315, 317 

Locke r. Prescott 506 

Lodge r. Pritchard 652 

Logan r. Le Mesurier 358 

London Chartered Bank r. White 505 
London, Chatham & Dover Ry. 

Co. r. S. E. Ry. Co 319,320 

London & County Bank r. Rat- 

cliffe 506, 571 

London Financial Association r. 

Kelk 614 

London Joint Stock Bank r. 

Simmons 571, 603 

London Tramways Co. r. Bailey 176 

Long r. Miller 585 

Lord Advocate r. Young 377 

I.orymer r. Smith 424 

Lovelock r. Franklin 435 

Lowe r. Fox , 266 



PAGE 

Lucas r. Dorrein 505 

Luchman Lall r. Ram Lall 657 

Luchmeswar Sing Bahadur r. 

Syad Lutf Ali Khan 260 

Lukmidas Khimji r. Purshotam 

Haridas 227,228,229 

Lunn r. Thornton 372, 373 

Lupton r. White 495 

Lutchmanen r. Siva Prokasa 620 

Lutscher r. Comptoir d'Escompte 507 
Lyell r. Ganga Dai 486 

- v. Kennedy 539, 543 



Lyon r. Knowles 615 

Lyons r. Elliott 608 

Lyons, Mayor of, r. East India Co. 2 
r. Hoffnung 398 



McBAiN f. Wallace 

McCarthy r. Young 

McClean r. Kemiard 

McCollin r. (Jilpin 

McCorkindale, Be 8, 

McEwan r. Smith 379, 

Macfarlane r. Taylor 

McGowan r. Dyer 

Machaima r. Usman Beari 

Mackay r. Commercial Bank of 
New Brunswick ... 

r. Dick 247, 

McKenzie r. British Linen Co. 

Mackenzie r. Chamroo 

r. Pooley 

r. Shib Chunder Seal 

r. Striramiah 

Mackertich r. Nobo Coomar Roy 
Mackillican r. Compagnie des 

Messagerhs Maritimes de 

France 28, 

Mackinnon r. Lang 589, 

Mackintosh v. Crow 323, 

- r. Hunt 104, 

r. Wingrove 

Maclenn v. Dunn 407, 

McLean r. Fleming 607, 

McMahon r. Field 

Madden r. Kempster 

Madgwick r. Wimble 

Madhavji r. Ramnath 

Madho Singh r. Kashi Ram 

Madhub Chunder r. Rajcoomar 

Doss 45, 

Madhwa Sidhanta r. Venkatara- 

iiianjulu 

Madras Harbour Trustees r. 

Bust & Co 

Madras Ry. Co. r. Govinda Ran 

Maganbhai Hemchand r Mauch- 

habhai K allianchand 1 90, 

Mahalinga Nadar v. Ganapathi 

Subbicn 496, 

Mahamad r. Parameswara 

Mahamed Ishag r. Sheikh Akra- 

mul Hug 

Maharaja of Benares v. Har 

Narain Singh 



347 
486 
641 
585 
508 
391 
427 
604 
59 

605 
248 
540 
35 
530 
241 
168 
306 



489 
590 
326 
326 

86 
408 
531 
313 
570 
659 
108 

86 

165 

6, 7 

492 
28, 
310 



512 
121 

233 

260 



TABLE OF CASES. 



xliii 



Maharana Shri Jasvatsingji 
Fatesingji r. The Secretary 

of State for India 411 

Mnhbub Jan r. Nurud-Din 159 

Mahomednlly v. Schiller 518 

Mahomed Arif r. Saraswati 55 

Mahomed Buksh r. Hosseini Bibi 82 
Mahomed Kola Mea r. Harpenick, Add. 
Mahomed Sultan Sahib v. 

Robinson 522 

Mahony r. Kekute 589 

Makin r. Watkinson 285 

Malukchaml r. Shan Moghan ... 521 

Manbyr. Scott 523 

Mancharam c. Pranshankar 143 

Manchester Trust r. Furness . . . 530, 
585, 603 

Manchubhai r. Tod 553 

Mangal Sen r. Shankar...267, 268, 269 
Mangalathammal r. Narayana- 

swami Aiyar 293 

Manian Patter r. Madras Ry. Co. 340, 

342 
Manindra Chandra Nandy v. 

Jamahir Kumari 293 

Manjunatha r. Devamma 635 

Man Kuar r. Jasodha Kuar ...128, 157 

Manmohandas r. Macleod 91, 121 

Mann r. Forrester 572 

Manna Lai r. Bank of Bengal 151, 153 
Mannu Singh r. Umadat Pande 78 

Manohar Das r. Ram Antar 123 

Manohur Koyal r. Thakur Das 

Naskar 263, 273 

Manoo Bepari v. Durga Churn 

Saha 328 

Mansell r. Clements 568 

Mansuk Das r. Rangayya Chetti 220 

Madam Bibi r. Sakina 81 

Marsh r. Jelf 529 

r. Joseph 542 

(-.Keating 631 

Marshall r. Berridge 308 

Martindale r. Smith 390, 407, 436 

Martineau r. Kitching 360, 370 

Martyn r. Gray 624 

Marudamuthu i: Rangasami ... 119 

Marvin r. Wallace 376, 378 

Masjidi r. Mussammat Ayisha...72, 79 

Mason, lie 573 

Master r. Miller 266 

Masulipatam, Collector of, r. 

Cavaly Vencata 540 

Mather, HP 576 

Mathra Dass r. Ramanand 344 

Matthews r. Munster 526 

Maugban r. Sharpe 618 

Mauji Ram r. Tara Singh 540 

May r. Harvey 500 

Maya Ram r. Naubat 335 

Mayen f. Alston 562 

Mayhew r. Crickett 472 

Mear r. L. & S. W. Ry 517 

Medina, The 529 

Meekr. Wendt 599 

Megaw v. Molloy 424 

Meghan Dube r. Pran Singh ... 56 



PAGE 
Meherally v. Sakerkhannobai 124, 257 

Mehr Singh r. Chela Ram 234 

Meredith v. Footner 607, 608 

Merryweather v. Nixan 231, 232 

Mersey Steel and Iron Co. r. 

Naylor, Benzon & Co. ...217, 244, 
435 

Merwanji r. Rustomji 661 

Mesha Ahronel r. The National 

Bank of India 267 

Metcalf r. Bruin 651 

Metropolitan Bank r. fleiron ... 561 

Mews v. Carr 528 

Meyer v. Dresser 9 

Miajan Patari r. Abdul Juhhar 337 

Michael r. Briggs 589 

r. Hart&Co 306 



Mildred r. Maspons 572 

Miles, Ex parte 399 

- r. Gorton 379, 383 

r. New Zealand Alford 



Estate Co 23, 151 

Milgate r. Kebble 378 

Miller v. Nasmyth's Patent Press 

Co., Ltd 504, 507 

Mills f. Dunham 167 

Millvvard v. Littlewood 127 

Mirabita r. Imperial Ottoman 

B:.nk 365 

Mir Sarwarjan r. Fakharuddin 58 

Misa r. Currie 505, 506, 571 

Mitchell r. Homfray 75 

f. La page . 



Mitchell, Reid & Co. r. Buldeo 

Doss 350, 382, 420 

Mitcheson v. Oliver 530 

Mody r. Gregson 424, 426 

Moffatt r. Bateman 557 

r. Parsons 602 



Mohendra Nath r. Kali Proshad 551 
Mohesh Chandra r. Boydya 

Nath 231 

Mohesh Chandra Bosu r. Radha 

Kishore Bhattacherjee 518 

Moliori Bibce r. Dhurmodas 

Ghose 53, 55, 56, 57, 276, 286 

Mohun Lall v. Sri Gungaji Cotton 

Mills Co !>4 

Moliur Singh v. Sher Singh 296 

Moll, Schutte & Co. r. Luchmi 

Chand 409 

Mollett r. Robinson 559 

Moll wo, March & Co. r. Court of 

Wards 612, 615, 616, 621, 624 

Molony r. Kernan ,.. 561 

Mondel r. Steel 432 

Monhunlal Tribhuwandas r. 

Chunilul Harinarayan 304 

Monmohini Guha r. Banga 

Chandra Das 125 

Montagu t. Forwoo<l 535, 572,596 

Montaignac v. Shitta 602 

Montgomery r. Thompson 619 

Moon r. Witney Union 533 

Mooneappah r. Vencatarayadoo 261 
Moonshee Buzloor Ruheem v. 

Shumsoonissa Begum 81 



xliv 



TABLE OF CASES. 



PAGE 

Moothora Kant r. India General 

Steam Navigation Co 489 

Moothora Kant Shaw r. India 
General Steam Navigation 
Co 8,9 

Morel Brothers & Co. r. Earl of 

Westmoreland 523, 5'J7 

Morgan r. Bain 390 

v. Birnie 197 

r. Couchman 597 

v. Haidarabad, Govern- 

ment of 100, 101 

r. Ravey 491 

Morice r. Simla Bank Corpora- 
tion 459,460,466 

Morisonv. Thompson 543 

Morley v. Attenborough 421 

Morrell r. Cowan 449 

Morris r. Cleasby 519 

Morrison, Ex parts 565 

r. Verschoyle 620 

Morritt, lie 511 

Mortimer r. McCal Ian 374 

Morton v. Lamb 243 

Moss, Re 508 

Mothooranath v. Kristokumar ... 290, 

291, 292 
Mothoormohun Roy v. Soorendro 

Narain Deb 84, 104 

Motilal v. Govindram... 182, 185, 191, 

192 

r. Surajmal 240 

Motilal Bechardass i: Ghellabhai 

Hariram 227, 229, 233, 23.5 

Motoji r. Shekh Husen ...334, 335, 337 

Monle r. Garret* 287,291, 439 

Moult v. Halliday 9 

Moung Tha Hnyin v. Mah Thein 

Myah 645 

Mountstephen r. Lakeman 441 

Mowbray r. Meny weather 309 

Muhammad Askari r. Radhe Ram 

Singh 227,229,230 

Muhammad Shah r. Sarsuti 262 

Mujib-un-Nissa r. Abdur Rahim 544 

Mul Singh r. Kishan Gopal 331 

Mulji r. Nathubhai 384 

Mulk Raj v. George Knight 235 

Mullens r. Miller 524 

Municipal Corporation of Bom- 
bay r. Cuverji Hirji 568 

Munsbi Amir Ali r. Maharani 

Inderjit Koer 174 

Munshi Basiruddiu Mullick r. 

Surja Kumar Naik 630 

Murlidhar r. Bhikhi 296 

Murray r. East India Co 526 

v. Mann 567 

Musammat Kundan Bibi r. S' - ee 

Narayan 157 

Mussammat Roshun r. Muham- 
mad 127, 146, 280 

Muthura Persad r. Luggun Kooer 326 
Muthuraman Chetty v. Krishna 

Fillai 280 

Mycock v. Beatson 648 

Myler v. Fitzpatrick 536 



PAGE 

NADIMULLA r. Channappa 262 

Naganada r. Bappu 514 

Nagardas r. Ahmedkhan 317, 318 

Nagendrabala r. Guru Doyal ... 566 

Nait Ram r. Shib Dat 323, 338 

Namasivaya Gurukkal r. Kadir 

Animal 206 

Nanak Chand r. Durant 132 

Nanak Ram r. Mehin Lai 443 

Nanda Singh r. Sunder Singh ... 126 

Nanjappa r. Nanjappa...326, 327, 330 
Nanku Ram r. Indian Midland 

Ry. Co 41)1 

Nant-y-glo Iron Co. r. Grave ... 561 

Naoroji v. Kazi Sidick Mirza ... 121, 

160, 273 

r. R< >gers 2 

Narain Das r. Chait Ram 326 

Narain Singh r. Mata Prasad 

Singh 443 

Narasimma v. Anantha Bhatta... 143 

Narayjn r. Ganesh 473 

r. Raoji Ill 

Narayan Coomari Debi r. Shajani 

Kanta Chatterjee ...125, 152, 564 
Narayan Undir Patil v. Motilal 

Ramdas 177 

Narayana Chetti r. Lakshmana 

Chetti 229 

Narayanasami r. Lokanibalam- 

mal 13 

Narayanasami Naidu r. Narayana 

Rau 330 

Narayansami i: Osuru Reddi ... 300 

Narotum r. Nanka 59 

Nash r. Inmaii 57 

Nath r. Nibaran Chandra 323 

Nath Prasad r. Baij Nath 28S.2!i7 

Nathu r. Balwantrao 298 

Nathubhai r. Javlier 59, 522 

r. Mulchaud (i 

National B jlivian Navigation Co. 

v. Wilson 602 

Naushani Begam r. Iiiti/ar 

Begam 82 

Navasimma r. Anantha Bhatta 143 
Nawab Mir Kamaludinr. Partap 

Mota 291 

Neale r. Gordon Lennox 527 

Neck ram c. Bank of Bengal 512 

Neel Comul Mookerjce .r. Bipro 

Dass 651 

Neilson r. James 557 

Nelson /-. Aid ridge ">-".> 

Nevill, lie. Ex part c White 519 

New r. Swain 387 

New South Wales, Bank of, r. 

O'Connor 510 

New Zealand and Australian 

Land Co. r. Watson 535 

Newall r. Tomlinson 610, 611 

Nicholson, He 573 

v. Bradtield Union ... 435 

v. ( hapman 502 

r. Harper 416 

v. Ricketts 637 

Nim Chmd r. Jagabundhu ...... 512 



TABLE OF CASES. 



xlv 



PAGE 

Nirpat v. Shadi 260 

Nitidals Taendstikfabrik v. Bruster 5G9 
Nobin Chunder v. Romesh Chunder 7 
Nobiu Krishna Bose v. Mon 

Mohun Bose 297 

Nordenfelt v, Maxim Nordenfelt 

Co 164, 171 

Norrington v. Wright 244, 251 

North British Insurance Co. v. 

Lloyd 476 

North-Western Bank v. Poynter, 

Son & Macdonalds 509, 573 

North-Western Provinces Club v. 

Sadullah 589 

Norton . Herron , 585 

Nottingham Building Society r. 

Thurstan 276 

Nottingham, Hide & Co. v. 

Bottrill 447 

Netting Sill, The 314 

Nowell v. Nowell 642 

Nundo Kishore Lall v. Musst 

Ramsookhee Kooer 264 

Nundo Lai v. Nistarini 526, 527 

NurAli Dubashr. Abdul Ali... 165, 167 
Nursey Spinning and Weaving 

Co., Re 1 J6, 101 

Nyberg v. Handelaar 494, 516 

" OAKDALE," The 590 

Oakes & Co. . Jackson. ..164, 166, 171 

Oakley v. Pasheller 451 

Gates v. Hudson 611 

Oceanic Steam Navigation Co. 

r. Soonderdas Dhurumsey...96, 97 
Odessa Tramways Co. v. Mendel 609 

Offord v. Davies 34, 449 

Ogdent'. Hall 586, 589 

- v. Ogden 10 

Ogg r. Shuter 365,367 

Ogle v. Vane, Earl 303 

Olati Pulliah Chetti v. Varada- 

rajulu Add. 

Ollivant v. Bayley 429 

Omda Khanum v. Brojendro 10 

Onward, The 530 

Oom v. Bruce 588 

Oppenheimerw. Attenborough 410, 412 
v. Frazer & Wyatt 410, 
414, 415 
Oriental Bank Corporation v. 

Fleming 66, 67, 95 

Oriental Financial Corporation 

v. Overend, Gurney & Co.... 465 
Oriental Government Security 
Life Ass. Co.. Ltd. r. Nara- 

simha Chari ' 29, 279 

O'Rorke v. Bolingbroke 82 

Oscanyan v. Winchester 144 

Oswald v. Mayor of Berwick ... 452 

Overend v. Gibb.. 557 

Overend, Gurney & Co. v. Orien- 
tal Financial Corporation... 451, 
452 

Owen v. Cronk 611 

Owen & Co. v. Cronk 536 

Oxford v. Provand .., ,249 



PAGE 

PADQ-KT v. Priest 611 

Page v. Cowasjee Eduljee 408 

v. Cox 19 

v. Morgan 376 

v. Newman 320 

Paice v. Walker 586 

Palmer v. Hutchinson 591 

v. Wick, etc., Steamship 

Co 232 

Panmure, Etc parte 600 

Pape v. Westacott 524 

Paquin v. Beauclerk 523 

Parakh Govardhanbhai Hari- 

bhai r. Ransordas Dulabh- 

dhas 187, 194 

Paramma v. Ramachandra 268 

Parana, The 305 

Parbhudas Pranjivandas v. Ram- 

lal Bhagirath 244 

Pardhan Bhukhan Lal-r. Narsing 

Dyal 328, 329, 330 

Park v. Hammond 557 

Parker, .Re 576 

v. Ibbetson 567 

v. Lewis 440 

v. McKenna 561 

v. Palmer 423, 424 

r. S. E. Ry. Co 28 

v. Wallis ... .431 



v. Winlow 586 

Parkins v. Hawkshaw 608 

Parkinson r. Lee 426, 430 

Parmichand v. Nanoo Sauker ... Add. 

Pater v. Gordon 590 

Paterson r. Gandasequi 597 

Pattinson v. Luckley 266 

Paul Beier r. Chotalal Javerdas 52 

Pava v. Govind 334, 335, 337 

Pavanaga r. Govind 7 

Payne, Re 582 

v. Cave 34 

v. Hornby 653 

v. Leconfield 529 

Peacock v. Baijnath 405, 506, 535 

Pearce r. Brooks 115, 126 

Pearl v. Deacon 472 

Pearson r. Goschen 531 

v. Scott 525, 565 

Pearson's Case 561 

Peek v. Gurney 91 

Pepin v. Chunder Seekur Mooker- 

jee 440 

Peria Sami v. Representatives of 

Salugar 106 

Periasami Thalavar r. Subra- 

manian Asari 32G 

Perosha v. Manekji 182, 184, 187, 

188, 189, 190, 191, 192, 194 

Perry v. Barnett 575 

v. Liverpool Malt Co 176 

Pertab Chunder r. Mohendra- 

nath Purkhait. 97 

Pertab Singh r. The Secretary 

of State 299 

Perundevitayar v. Nammalvar. . . 487 

Pestanji v. Matchett 546 

Pestonji v. Gool Mahomed 521 



xlvi 



TABLE OF CASES. 



PAGE 

Fetch r. Turner 608 

v. Tutin 372 

Petherperumal r. Muniandy 280 

Petty r. Cooke 4(53 

Phalli v. Matabadal 122 

Phelps, Stokes & Co. r. Comber 406 
Phillips r. Alhambra Palace Co. 224 

v. Foxall 448, 468 

Phillpotts v. Evans 220, 435 

Phoenix Bessemer Steel Co., lie 390 
Pichakutty Mudali v. Naraya- 

nappa 128 

Pickering i'. Busk 602 

v. Ilfracombe Ky. Co. 145, 

146 

Pickernell r. Jauberry 531 

Pidock v. Bishop 475 

Pigot v. Cubley 511 

Pike v. Ongley 587 

Pillai v. Ramalinga Pillai 125 

Pillay v. The Municipal Commis- 
sioners of Madras 174 

Pinet & Cie. r. Maison Louis Pinet 619 

Pini v. Roncoroni 659 

Piriasami Thalavar v. Subra- 

manian Asari 326 

Pirtha Das v. Hira Singh 280 

Pirthi Mai v. Gopi Nath 510 

r. Mussammat Bhagan 126 

Pitamber v. Cassibai 317 

v. Jagjivan 140 

Planche* v. Colburn 435 

Pledge r. Buss 472 

Pogose v. Bank of Bengal ...452, 469 

Polak v. Everett 454, 457, 473 

Pole v. Leask 523 

Poma Dongra r. William Gillespie 86, 

104 

Pooley v. Driver 613, 621 

Poonoo Bibee v. Fyez Buksli ... 147, 
155, 257 

Porter r. Incell 621, 624 

Potts*. Bell 129 

Poulton r. Lattimore 432 

Poussard v. Spiers and Pond ... 254 

Pow v. Davis 600 

Powell v. Brodhurst 234, 634 

v. Jones 534, 561 

Power v. Butcher 578 

Powles r. Paye 583 

P. R. and Co. v. Bhagwandas 

Chaturbhuj 311 

Pragji r. Pranjiwan 166 

Prag Narain v. Mul Chand 409 

Pratt v. Vizard 571 

Prayag v. Shyam Lai 336, 337 

Premabhai v. Brown 580 

Premji r. Dossa 635 

v. Madhowji 594 

Prem Narain Singh r. Parasram 85 
Prem Sook r. Dhurum Chand ... 168 
President of the Taluk Board, 
Kundapur, r. Burde Laksh- 

minarayana 341 

Prestwich v. Poley 527 

Price v. Easton 18 

Prickett v. Badger 550, 568 



PAGE 

Priest r. Last 428 

Priestly v. Fern ie 597 

Pringle v. Jafar Khan 194 

Prokash Chandra r. Adlam 125 

Prosad Doss r. Russick Lall 657 

Protab Chunder v. Gour Chunder 463, 

464 
Protima Aurat v. Dukhia Sirkar 127 

Proudfoot r. Montefiori 682 

Provincial Insurance Co. r. Leduc 588 
Pudishary Krishnen r. Karam- 

pally 80,132 

Pullen Chetty r. Ramalinga 

Chetty 125 

Punchanun Ghose r. Daly ...452, 404 

Punjab v. Petum Singh 231 

Purmanundass v. Cormack 597 

Purshotamdas Tribhovandas r. 

Purshotamdas Mangaldas ... 139, 
222, 255 

Pushong r. Munia Halwani 78 

Pusi v. Mahadeo Prasad 59, 522 

Puttappa Manjaya r. Virabha- 

drappa 240 

Putti Narayanamurthi r. Mari- 

muthu 479 

Pybus v. Gibb 452 

QUARMAN v. Burnett 623 

Queen Empress r. Appavu 344 

v. Joggessur 



Mochi 344 

Queen of Spain v. Parr 569 

RADHA . Kinlock 459, 461, 466 

Radha Bai r. Kamod Singh 122 

Radha Krishna Das r. Municipal 

Board of Benares 281, 283 

Radha Madhub Samonta r. Sasti 

Ram Sen 289 

Raffles v. Wichelhaus 63, 70 

Raghavan v. Alamelu Animal 292, 297 

Raghoji v. Abdul Karim 159 

Raghunath v. Nathu Hirji 118 

r. Varjivandas 78 

Ragnath Sahal r. Mam Raj 187 

Ragoonathdas r. Morarji 591, 636 

Rahmatulla v. Ganesh Das 265 

Railton r. Mathews 474 

Rainbow r. Howkins 437 

1: Juggins 472 

Rainbow, The 573 

Raja Mohkan Singh v. Raja Rup 

Singh 84, 104, 135 

Raja Rai Bhagwat Dayal Singh 

r. Debi Dayal Sahu 538 

Raja Ram v. Meher Khan 264 

Rajah Papamma Row v. Sitara- 

mayya 78 

Rajah Venkatagrin r. Vudutha 

Subbarayudu 296 

Rajah Vurmah ^ 7 alia r. Ravi 

VurmahKunhi 143 

Rajan Harji r. Ardeshir Hor- 

musji 125 

Rajkristo Moitro v. Koylash 

Chunder ., 132 



TABLE OF CASES. 



xlvii 



PAGE 

Rajlukhy Dabee v. Bhootnath ... 155 

Raj Narain v. Ful Kumari Debi 449 

Rakhmabai v. Govind 19 

Raman v. Vairavan 597 

Raman Chettiyar v. Gopalachari 240 

Ramanuja v. Narayana 135 

Ramanund i\ Chowdhry Soonder 

Narain 455 

Ramasami r. Kadar Bibi 657 

r. Rajagopala 79 

Ramasami Chetti v. Manikka 

Mudali 235 

Ramasamy Kon's Case 269 

Ramayya r. Chandra Sekara 657 

Ramayyar v. Shanmugam 267 

Ram Bharose v. Kallu Hal 635 

Rambhat v. Timmayya 140 

Ramchandra v. Bhimrav 7 

v. Damodhar 645 

Ramchandra Atmaram i: Damo- 

dar Ramchandra 290 

Ramchandra Chintaman v. Kalu 

Raju 152 

Ram Chand Sen v. Audaito Sen 139 

Ram Chunder v. Manick Chunder 657, 

661 
Ram Coomar Coondoo v. Chunder 

Canto Mookerjee 2, 133, 134, 

135, 137 
Ram Das v. Official Liquidator 

Cotton Ginning Co 32 

Ramdoyal v. Junmenjoy 622 

Ramendra Roy r. Serajuddin 

Ahamed 328 

llameshwar Prosad v. Lachmi 

Prosad 151 

Rameshwar Prosad Singh r. Rai 

ShamKishen 326,330,332 

Rameswar Koer v. Mahomed 

Mehdi Hossein Khan 259 

Ramghulam v. Janki Rai 174 

Rainier v. Shunmugam Pillai ... 267 

Ramji v. Dharma 159 

Ram Kinkar v. Akhil Chandra... 234 
Ram Kishen v. Rani Bhagwan 

Kaur 299 

Ramkrishna v. Ramabai 233 

Ramlal Thakursidas v. Lakhme- 

chand Muniram 620 

Ramloll Thackoorseydass r. Soo- 

jumnnll Dhondmull 180 

Ram Narain r. Ram Chunder ... 233, 

235 
Rampal Singh v. Balbhaddar 

Singh... 581 

v. Murray & Co. 491, 

492 

Rampartab v. Foolibai 628 

Ram Pershad Singh v. Neerbhoy 

Singh 231 

Ram Pertab v. Marshall 603 

Ram Prasad v. Salik Ram 290 

Ram Sarup v. Kishan Lai 122 

Ramsebuk v. Ramlall Koondoo 233, 

234 
Ramsgate Victoria Hotel Co. v. 

Montefiore 39 



PAGE 

Ram Sukh v. Brohmoyi Dasi ... 485 
Ram Tuhul Singh v. Biseswar 

Lai 290,297 

Ranchhoddas Nathubhai v. Jey- 

chand Khushalchand 1 59 

Ranchod i: Manmohandas 318 

Randall v. Newson 426,427 

Ranee Lallum Monee Dossee r. 

Nobi Mohun Singh 139 

Rangammal v. Venkatachari 280 

Ranganayakamma r. Alvvar Setl.i 73, 

80 
Rangasawmi v. Trisa Maistry ... 255 

Ranguath v. Govind 80, 87 

Ranjit Singh v. Naubat 459, 461, 462, 
466, 467 

Rasaji v. Sayana 326 

Rash Behary Shaha v. Nrittya 

Gopal Nundy 217, 219 

Rawson v. Johnson 246 

Ray v. Barker 351, 352 

Raymond v. Minton 285 

Rayner v. Grote 600 

Read v, Anderson 188, 548 

v. Rann 567 

Readhead v. Midland Ry. Co. ... 430 

Reddaway v. Banham 619 

Redgrave r. Hurd 101 

Redpath v. Wigg 586 

Reed v. Norris 479 

Rees v. Berrington 463 

v. De Bernardy 133 

Reeve v, Davis 531 

Reg. v. Ashwell 484 

r. Demers 36 

r. McDonald 483 

Reid v. Macbeth and Gray 356 

v. Rigby & Co 605, 631 

Renpor, The 529 

Renter v. Sala 251 

Reyner r. Pearson 608 

Reynolds v. Jex 531 

Rhodes r. Bate 77,79 

v. Forwood 549 

-v. Moules 630 

Richardson v. Anderson 528 

v. Goss 507 

v. Rowntree 28 

v. Williamson 599 

Ridgway i\ Clare 652 

v. Wharton 43 

Ridley c. Plymouth Grinding Co. 519 

Right and Fisher v. Cutbell 543 

Ripley v. McClure = 221 

Roberts, Re 378 

v. Barnard 568 

v. Bury Commissioners 247 

1\ Crowe 439 

r. Ogilby 566 

r. Security Co 41 

v. Smith 197 

Robertson v. Amazon Tug and 

Lighterage Co.... 487 

v. Clarke 530 

v. French 52 

v. Wait 587 

Robinson i\ Ashton 640 



xlviii 



TABLE OF CASES. 



PAGE 
Robinson c. Davison 253 

v. Geisel 230 

r. Harkiu 480 

v. Harman 315, 316 

v. Mollett 527,528 

r. Read 597 

v. Butter 570, 592 

Robson r. Drummond 224 

r. Kemp 573 

Rocher v. Busher 530 

Rodger r. Comptoir d'Escompte 

de Paris '. 403 

Roehm r. Horst 221 

Rogers r. Hadley 592 

Rogers, Sons & Co. v. Lambert 

&Co 501 

Rohde v. Thwaites 361 

Rohilkhand and Kumaun Bank 

r. Row 54 

Rolfe r. Flower 262, 629 

Rolland r. Hart 583 

Roots v. Lord Dormer 437 

Roper r. Johnson 306, 436 

Rosevear China Clay Co., Ex 

parte 396 

Ross v. Parkyns 615 

Rossiter v. Walsh 562 

Rouse v. Bradford Banking Co. 451 
Roushan Bibee v. Hurray Kristo 

Nath 263 

Routh v. Macmillan 526 

Routledge v. Grant 34 

Rowe K. Pickford 395 

Royal Bristol Permanent Build- 
ing Society r. Bomash 316 

Ruben v. Great Fmgall Consoli- 
dated 68, 606 

Rugg r. Minett 359 

Rughoonauth c. Manickchund... 170 

Russell r. Russell 645 

Rustomji r. Sheth Purshotamdas 657, 

659 

Ruttonsey v. Jamnadas 213 

Ryder v. Wombwell 58 



SABIHAN BIBI v. Madho Lai ... Ill 
Sadagopa Ramanjiah r. Mac- 
kenzie 168 

Sada Kavaur v. Tadepally 107 

Sadashiv -r. Trimbak 55 

Sahib. Ram v. Nagar Mai 126 

Saiyid Ali Khan r. Debi Prasad 512 

Sajaji v. Maruti 326 

Salford, Mayor of, v. Lever ...561, 609 

Salomans r. Pender 561 

Salter r. Woollams 380 

Salvesen & Co. *. Rederi Aktie- 

bolaget Nordstjernan 

Samalbhai v. Someshwar 

Saminatha v. Muthusami 

Samuel t\ A nanthanatha 

Samuell v. Howarth 

Sanderson v. Aston 

v. Collins . 



.. 598 
.. 619 
.. 143 
.. 18 
.. 456 
.. 454 
.. 492 

Sankana r. Virupakshapa... 445,459, 

466 



PAGE 

Sankara r. Sankara 324 

Sankaranarayana Vadhyer r. 

Sankaranarayana Ayyar ... 329, 
330, 336, 337 

Sankarappa r. Kamayya 125 

Saral Chand Mitter v. Sreemutty 

Mohun Bibi 59 

Sarat Chandra Dey v. Gopal 

Chandra Laha 623 

Sarat Chandra Roy r. Rajoni 

Mohan Roy 108,446 

Sardar Muhammad v. Babu 

Daswandlie 566 

Sarju Prasad v. Beni Madho 333 

Sashannah Chetti v. Ramasamy 

Chetti 127, 152 

Sashi Bhusan v. Jadu.Nath 55 

Sasoon v. Tokersey 181, 182, 184, 

188, 189, 190, 193 

Sass, Re 471 

Satish Chunder v. Hem Chunder 86 
Saturjit Pertap Bahadoor v. 

Dulhin Gulab Koer 541 

Saunadanappa v. Shivbasawa ... 7 

Saunders v. Stuart 307 

. Sun Life Assurance 

Co. of Canada 619 

Sayad Muhammad v. Fatten 

Muhammad 61 

Scarf v. Jardine 262, 626 

Scarfe v. Morgan 503 

Schmaltz v. A very 590, 600 

Schonlank i: Muthunagana 

Chetti 34 

Schotsmans r. L. & Y. By. Co. ... 394, 

396 

Schntze r. G. E. Ry. Co 310 

Scotson v. Pegg 153 

Scott r. Avery 175 

v. England 437 

c.Irving 528 

K. Littledale 63 

v. Pettit 395 

v. Sebright 70 

v. Uxbridge and Rickmans- 

worth Ry. Co 212 

Seager i. Hukma Kessa 415, 514 

Searle v. Laverick 487 

Seathv. Moore 355, 356,357 

Seaton v. Burnand 476, 477 

Secretary of State for India v. 

Abdul Rahim 320 

r. Arathoon 197 

r. Fernandes 293 

v. Kamachee Boye ... 539, 

540 

v. Nilamekam 476 

v. Sheo Singh 484 

r. Sheth Jeshingbhai 106 

Seddon r. North Eastern Salt Co. 436 

Seth Gokul Dass r. Murli Ill, 125 

Seton r. Slade 544 

Sewdutt Roy Maskara i: Naha- 

piet 601 

Seymour r. Bridge 575 

r. Pychlau 578 

Shadi Ram r. Mahtab Chand . , 516 



TABLE OF CASES. 



xlix 



PAGE 

Shadwellr. Shadwell 153 

Shah Rahman v. Ismail Khan ... 131 

Shaik Alii v. Mahomed 458 

Shaik Ismail v. Amirbibi 82 

Sham Charan Mai v. Chowdhry 

Debya Singh 286 

Shama Charan K. Chuni Lai 122 

Shama Purshad Roy r. Hurro 

FurshadRoy 301 

Shambati Koeri v. JagoBibi 81 

Sham Koer v. Dah Koer 81 

Sham Lall Mitra v. Amarendro 

Nath Bose 280, 286 

Shandw. Grant 610 

Shankar v. Mohanlal 414, 415 

Sharland v. Mildon 611 

Sharpe v. Foy 583 

Shaw v. Baij Nath 518 

v. Picton 566 

v. Woodcock 519 

Shee v. Clarkson 567 

Sheffield Corporation r. Barclay 438, 

575 

Sheffield v. Eden 508 

Sheldon v. Cox 344 

Sheoambar v. Deodat 177 

Sheo Narain r. Mata Prasad 142, 564 

Shepherd v. Harrison ...364, 365, 366, 

367, 368 

Sheppard r. Oxenford 660 

Sheridan v. New Quay Co 501 

Shet Manibhai v. Bai Rupaliba 599 

Shiam Lai r. Chhaki Lai 564 

Shib Chandra Roy r. Chandra 

Narain Mukerjee 558 

Shibho Mai r. Lachman Das... 187, 575 
Shiddheshvar r. Ramchandrarav 538 

Shidhappa v. Shivalingappa 654 

Shidlingappa v. Shankarappa ... 660 

Shields v. Wilkinson 492 

Shiells v. Blackburne 557 

Shipway v. Broadwood 609 

Short t: Spackman 588 

Shoshi Mohun Pal r. Nobo Kristo 

Poddar 102, 360, 371, 431 

Shridhan Gopinath v. Gordhan- 

das Gokuldas 303 

Shri Ganesh v. Keshavrav 7 

Shrinivas v. Raghunath 158 

Shripatrav v. Govind Narayan .. . 160 

Shriram r. Madangopal 245 

Shrish Chandra Roy v. Mungri 

Bewa 516 

Shugan Chand t: Government of 

North-Western Provinces ... 300 

Silvester, .Re 450 

Simmons r. Swift 358 

Simons r. Patchett 599 

Simpson v. Chapman 655 

- r. Crippin 244 

r. Lamb 568 

__, r . L. & N.-W. Ry. Co.... 311 

Sims t'. Bond 578, 594 

v. Landray 528 

Simson v. Gora Chand Doss 213 

- v. Virayya 218, 249 

Sinaya Pillai v. Munisami Ayyan 276 

I.C. 



PAGE 
Sindha Shri Gampatsingji v. 

Abraham 15, 21, 156 

Sirdar Kuar v. Chandrawati 264 

Sital Prasad v. Parbhu Lai 80 

Sitaram r. Doji 267 

r. Mussamut Aheeree 

Heerahnee 123 

r. Shridhar 235 

Sitaram Marwari v. Thompson... 47 
Sitarampur Coal Co. v. Colley ... 557 
Siva Panda v. Jujusti Panda ... 232 

Siva Ramayya v. Ellamma 135 

Skeikh Ahbar v. Sheikh Khan... 265 

Skillett v. Fletcher 454 

Skinner v. Jager 504 

Sloman v. Walter 340 

Smart r. Sandars 527, 545 

Smethurst v. Mitchell 597 

Smith, Re, Ex parte Bright 519 

Smith v. Anderson 613 

- v. Bailey 626 

v. Bedouin Steam Naviga- 
tion Co 531,607 

v. Chadwick 103 

r. Dinonath 288, 297 

r. Green 309 

r. Hughes 63, 93 

v. Jeyes 659 

v. Kay 76 

r. Lascelles 552 

v. Lyon 592 

v. Patrick 262 

r. Sorby 609 

r. White 115 

r. Winter 654 

Smout v. Ilbery 551 

Snee v. Prescott 587 

Snook v. Davidson 572 

r. Watts 62 

Snowdon, Ex parte 481 

Socie"t Ge"ne"rale de Paris v. 

Tramways Union Co 583 

Solly v. Rathbone 571 

Solomon v. Barker 553 

Solomons v. Bank of England... 506, 

571 
Somu Pillai v. Municipal Council, 

Mayavaram 144 

Sooltan Chund v. Schiller ...216, 218, 
244, 245 
Soopromonian Setty v. Heilgers 

589, 590 

Soper v. Arnold 353 

Sorabji v. Dulabhbhai 658 

South Australia Insurance Co. 

r. Randell 344. 347, 484 

Southwell r. Bowditch 585 

Spalding r. Ruding 403, 405, 507 

Spartali r. Benecke 388 

Spears r. Hartley 573 

Spedding r. Nevell 600 

Spence -i: Union Marine Insur- 
ance 495 

Spencer v. Harding 47 

Spiers v. Hunt 127 

Spittle r. Lavender 585 

Sreegopal r. Ramchurn 44 

d 



TABLE OF CASKS. 



PAGE 
Sri Kishen r. The Secretary of 

State for India in Council... 445 
Srinivasa v. Rathnasabapathi 340, 341 
Srirangachariar Bamasami r. 

Ayyangar 146 

Staffordshire, The 530 

Stainbank v. Shepherd 530 

Standard Marine Insurance Co. 52 

Stanleys. Dowdeswell 41 

v. Jones 133 

Stapleton, Ex parte 390 

Stark, Re 450 

Stark ey v. Bank of England ... 598 

Startup r. Macdonald 201, 238 

Stead r. Salt 635 

Stearine Co. r. Heintzmann 553 

Steel v. Dixon 481 

r. Lester 617 

Stenning, Re 261 

Stephens v. Badcock 534 

Sterne v. Beek 341 

Steuart r. Gladstone 641 

r. Kennedy 64 

Stevens r. Biller 506 

Stevenson r. Blakelock 508 

r. McLean 34 

r. Mortimer 588 

Stewart r. Kennedy 64 

v. Ram Chand 135 

Stone v. Cartwright 536 

Storehouse v. Gent 530 

Street v. Blay 430 

Street er v. Horlock 483 

Strickland r. Turner 105 

Stubhs r. Holywell By. Co 204 

Subba Naidu v. Haji Badsha ... 166 

Subba Pillai r: Bamasami Ayyar 565 

Subba Bau v. Devu Shetti 220 

Subbaraya v. Devandra 194 

Subbarayudu v. Adinarayudu ... 658 

Subrahmania v. Krishna 269, 270 

r . Narayanan 546 

SubramaniaAiyar v. Subramania 

Aiyar 7 

Subraya Pillai v. Subraya 

Mudali 130 

Subroya Chetty r. Bagammall... 450 

Sudarsanam r. Narsimhulu...620, 645, 

660 

Sudhu Singh r. Lehna Singh ... 232 

Sudisht Lai r. Sheobarat Koer... 81 

Suffell v. Bank of England 266 

Suja r. Pahlwan 479 

Sultan v. Nana 126 

Sultan, The 530 

Sumer Chand r. Ardeshire 433 

Sumer Singh r. Shib Lai 290 

Sumpter r. Hedges 284 

Sumsuddin v. Abdul 81 

Sundaraja Ayyangar v. Pattana- 

thusami Tevar 286 

Sundar Deo r. Bhagwan Das ... 515 

Sundar Koer v. Bai Sham 86, 326, 

332, 333. 338 

Sunder Singh r. Kishen Chand 121 
Sungut Lai i: Baijnath Boy... 260, 826 

Suput Singh r. Imrit Tewari ... 231 



PAGE 

Surendra Nath Sarkar v. Atul 

Chandra Boy 558 

Surya Narain Singh r. Jogendra 

Narain Boy 328, 331 

Suryanarayana ?. Narendra 

Thatraz 159 

Sutton v. Grey 519 

r. Tatham 521, 527 

Swarnamoyee Debi r.Hari Das Boy 291 

Sweet v. Pym 572 

Sweeting v. Pearce 525 

r. Turner 370,371,528 

Swift r. Jewsbury 606 

Swire v. Francis 605 

r. Bedman 451 

Sykes r. Beadon 566 

Synge v. Synge 219, 221 

TAHAL v. Bisheshar 177 

Tailby r. Official Receiver 373 

Taluk Board, Kundapur r. Burde 

Lakshminarayana Kampthi 341 
Tamarasherri Sivithri v. Maranat 

Vasudevan 280 

Tamvaco v. Simpson 573 

Tanner v. Christian 585 

v. Smart 159 

Taplin r. Florence 545 

Tapling r. Weston 608 

Tarachand v. Girdhart Lai 86 

r. Suklal 136 

Taruak Chunder r. Jodeshur 

Chunder 418 

Tasker v. Shepherd 224 

Tate v. Hyslop 583 

Tatia v. Babaji 153 

Taylor, Re 573 

r. Bowers 548 

v. Caldwell 253 

r. Chester 258 

v. Kymer 572 

v. Metropolitan By. Co. 610 

r. Smith 376 

Taylor, Stileman and Underwood, 

Re 508 

Tejendro Narain r. Bakai Singh 339 

Tejpal v. Ganga 276 

Tekait Mon Mohini Jemadai r. 

Basanta Kumar Singh 124 

Tek Chand r. Morice 327 

Telu Mai r. Subha Singh 187 

Tempest r. Fitzgerald 376 

Tenant r. Elliott 566 

Tennant, Ex parte 661 

Tennent v. Tennents 162 

Tetley r. Shand 578 

Thacker v. Hardy 181 

Thasi Muthukannu r. Shunmu- 

gavelu 127 

y/teti*, The 530 

Thirukumare'an r. Subbaraya... 661 

Thithi Pakurudasu r. Bheemudu 118 

Thol r. Henderson 307 

Tholasirum r. Duraji 416 

Thomas Beck r. Thomas Siddle 230 

Thompson r. Adams 548 

v. Hudson . 340 



TABLE OF CASES. 



li 



PAGE 

Thomson r. Davenport 588, 594 

Thorn v. City Rice Mills 239 

Thome r. Heard 605 

Thornton r. Kempster 64 

Thoroughgood's Case (>5 

Thota Venkatachellasami v. 

Kristnasawmy 43 

Thynne v. Shove 641 

Tidd, Re 485 

Tiedemann and Ledermann 

Freres. Re 539 

Tigress, The 393 

Tillakchand r. Jitamal 158 

Tippanna v. Southern Maratha 

By. Co , 490 

Tod r. Lakhmidas 182, 184, 185, 189, 
190, 207, 209, 225 
Tolhurst r. Associated Cement 

Manufacturers 205, 225 

Tooke r. Hollingworth 386 

Toomey v. Rama Sahi 206 

Toonya Ram v. East India Ry. Co. 490 

Totakot v. Kurusingal 445 

Tovvnley v. Crump 388 

Townsend v. Jarmin 641 

v. Inglis 603 

Townsend's Case 32 

Tredwin v. Holman 175 

Trego v. Hunt 640, 641, 646, 649 

Tribe v. Taylor 568 

Tribhuvandas r. Motilal 187 

Trickett v. Tomlinson 602 

Trikam Damodhar r. Lala 

Amirchand 194 

Trimbak v. Bhagchand 326 

v. Bhagwandas 275 

Trimble r. Hill 182 

Trueman v. Loder 551 

Trustees of the Harbour of 

Madras r. Best & Co 492 

Tugman v. Hopkins 300 

Tulsa Kunwar r. Jageshar Prasad 287, 
288, 290 

Turley v. Bates 360 

Turner r. Ford 504 

v. Goldsmith 568 

v. Green 93 

v. Letts 571 

v. Liverpool Docks, Trus- 

tees of 365 

v. Major 655 

v. Thomas , 595 



Turton i: Turton 619 

Tutika Basavaraju v. Parry & Co. 589 
Tweddle v. Atkinson 16, 17, 18 

UDHO SHAH v. Hira Shah 264 

Udit Narain v. Muhammad 283 

Uganda, The 363 

Ultzen v. Nicols 485, 492 

Umarkhan r. Salekhan 323, 326, 328, 
329, 330, 334, 335 

Umed Kika r. Nagindas 222 

Umesh Chandra r. Golap Lai ... 86 
Umesh Chandra Banerjee r. 

Khulna Loan Co 292 

Underwood r. Nicholls 524 



PAGE 

Universal Stock Exchange, Ltd., 

r. Strachan 182, 191 

Upend ra Chandra v. Tara Pro- 

sanna 296,297 

VADILAL LALLUBHAI r. Shah 

Khushal Dalpatram 620 

Vaidyanatha Ayyar v. Chin- 

nasami Naik 235 

Vaikuntam v. Kallapiram 290 

Vairavan v. Ponnayya 660 

Vaithelinga r. Saminada 167 

Vaithyanatham v. Gangarazu ... 142 

Valentini r. Canali 276 

Vallamkondu v. Malupeddi ...620, 659 

Van Omeron v. Dowick 531 

Vappakandu Marakayar v. Anna- 

malai Chetti 194 

Vayangara r. Pariyangot 232 

Vengideswara Putter v. Chatu 

Achen 323,326,336 

Venkata r. Timmayya 286, 298 

Venkata Kristnayya v. Lakshmi 

Narayana Add. 

Venkatasamy r. Rangasamy 155 

Venkatasubbiah Chetty v. Govin- 

darajulu Naidu 629 

Venkatesh v. Baba 267 

Vicars v. Wilcocks 313 

Villars, Ex parte 421 

Vinayakrav v. Ransordas 563 

Virasvami r. Appasvami 522 

Vishnucharya v. Ramchandra ... 546, 



549 
110 
139 

218 



Vishnu Sakharam r. Kashinath 

Visvanathan r. ]3aminathan 

Volkart Brothers v. Rutna Vein 

Chetti ... 

r. Vettivelu 

Nadan 344 

Vyse v. Foster 655 

Vythilinga v. Ravana 335, 337 

v. Sundarappa 326 



WADDINGTON r. Bristow 

Waghela Rajsanji r. Shekh 

Masludin 

Wahid Ali r. Ashruff Hossain ... 

Wahidunnessa v. Surgadass 

Wait v. Baker 364, 

Wajid Khan r. Ewaz Ali 

Wake v. Harrop 

Wakefield r. Ne wbon 

Waldy v. Gray 

Walker, Re 

Walker r. Hirsch 

Walkers, Winser, & Hamm v. 

Shaw <fe Co 

Wall v. City of London R. P. Co. 

Wallace, lie 

r. Breeds 

r. Kelsall 

r. Woodgate 



Wallingford r. Mutual Society... 

Wallis v. Smith 322, 328, 

Walshe r. Provan 

Walter r. James 

d 2 



372 

58 
143 

67 
365 

78 
587 
611 
583 

62 
617 

422 

317 
526 
359 
234 
572 
341 
339 
570 
540 



Hi 



TABLE OF CASES. 



PAGE 
Walters r. Northern Coal Mining 

Co 636 

Ward, EJ- parte. Iff Eastgate ... 436 

r. National Bank of New 

Zealand 453,457, 467 

V. Stuart 567 

r. Turner 376 

Warlow r. Harrison 46, 547, 587 

Warwick v. Slade 549 

Waterer r. Waterer 640 

Watkins r. Dhunnoo Baboo ... 57, 286 

r. llymill 28, ?9 

Watson, Ex "parte 399 

- r. Allcock 467, 468 

v. Lyon 573 

r. Yates 159 

Watson & Co. r. Dhonendra 

Chunder Mooker jee 211 

Watteau r. Fen wick 524 

Watts r. Driscoll 644 

r. Shuttleworth 467 

Waugh r. Morris 115 

Wazarimal r. Ballia 141 

Webbr. Hewitt 458 

r. Hughes 251 

Webbe r. Lester 5 

Webster i: Seekamp 530 

Wedderburn v. Wedderburn 655 

Weeks r. Goode 573 

r. Propert 598 

Weidner r. Hoggett 586 

Weiner r. Gill 351,353 

Wellfield v. Adamson 529 

Wentworth r. Cock 203 

r. Lloyd 544 

West r. Steward 268 

West of England Bank r. 

Batchelor 573 

Western Bank of Scotland r. 

Addie 605 

Westropp r. Solomon 575 

West wood v. Bell 572 

Westzinthus, Re 403. 404 

Whaley Bridge Printing Co. r. 

Green 562 

Whateley r. Palanji 488, 491 

White, Ex parte 347.554 

Ex parte, Re Nevill 519 

f. Banckendorff 578 

r. Proctor 528 

r. Wilkes 361 

Whitechurch, Ltd. r. Cavanagh 606 
Whitehead r. Anderson... 394, 395, 406 

v. Tuckett 602 

Whitehouse r. Frost 361 

Whittaker, Ef parte. 90 

Whitwell r. Perrin 597 

Whymper r. Buckle 43 

Wigsell r. School for Indigent 

Blind 315 

Wilby r. Elgee 22, 151 

Wilde v. Gibson .. 583 



PAGE 

Wilding r. Sanderson 106 

Wilkinson r. Martin 568 

Willett r. Blandford 655 

Williams r. Bayley 130 

r. Evans 524, 529 

j-. Holmes .. 608 

r. Innes 608 

.,-. Millington 570, 587 

r. North China Insur- 

ance Co 539 

r. Stevens 561 

Williamson, Ex parte 643 

r. Barbour 635 

v. Barton 585 



Willis r. Baddeley 592 

r. Palmer . . ,526 



Willson v. Love 323 

Wilson r. Brett 487, 557 

r. Carnley 127, 129 

r. Finch-Hatton 487 

v. Greenwood 659 

r. Lane. & Yorks. Ry. Co. 310 

v. Tumman 538 

r. Turner 608 

Wilson, Sons & Co. v. Balcarres 

Brook Steamship Co 230 

Windhill Local Board r. Vint.... 130, 

131 

Wingfield, Ex parte 352 

Wing/ield, The 493,517 

Winnr. Bull 41.42 

Wiseman r. Vandeput 392 

Withers r. Reynolds 216, 250, 435 

Wolmershausen r. Gullick 480 

Wolstenholm v. Sheffield Bank. . . 505 
Wood r. Bell 356 

r. Priestner 446 

v. Woad 645 



Woodley r. Coventry 39 1 

Woods r. Russell 356 

Woolfe r. Home 587 

Wren r. Holt 423 

Wright r. Carter 77 

r. Vanderplank 87 

Wulff /-.Jay 472 

Wylde v. Radford 505 

Wythes v. Labouchere 452 

XENOS r. Wickham 528 

YARAMATI r. Chundru 280 

Yarlagadda Veera Ragavayya v. 

Gorantta Ramayya 265 

Yi-llappa v. Dasayappa 512 

Yonge r. Reynell 473 

Young & Co. r. Corporation of 

Royal Leamington Spa 281 

Young, E.r parte 444 

r. Cole 574 

- r. Matthews 359 

r. Schuler 586 

Yule & Co. r. Mahomed Hossain 409 



TABLE OF STATUTES CITED. 



PAGE 

29 Car. II. c. 3 (Statute of 

Frauds), s. 4 374 

s. 17 (rep.) 345, 

376 n., 377, 380, 383 
14 Geo. III. c. 48 (Life Insur- 
ance) 181, 193 

21 Geo. III. c. 70, s. 17 2 

37 Geo. III. c. 142 (East India 

Company's Act, 1797), s. 28 121 
s. 13 2 
49 Geo. III. c. 126 (Saleof Offices 

Act, 1809), s. 3 143 

;{ A; 4 Will. IV. c. 85 (Govern- 
ment of India 
Act, 1853) ... 7 
c. 42, s. 28 (Lord 

Tenterden's Act) ..: 319 

5 & 6 Viet. c. 39 (Factors Act, 

1842) (rep.) 405, 410,412,418, 

513 
8 & 9 Viet. c. 109 (Gaming Act, 

1845). s. 18 180, 181 

11 & 12 Viet. c. 21 (Indian Insol- 
vency), ss. 9, 24 91,209 

16 & 17 Viet. c. 70 (Lunacy Regu- 
lation Act, 1853) 61 n. 

19 & 20 Viet. c. 97 (Mercantile 
Law Amendment Act, 1856). 

s. 4 '. 651 

s. 5 470 

28 &29 Viet. c. 86 620 

37 & 38 Viet. c. 62 (Infants' 

Eelief Act, 1874) 54, 56 

45 & 46 Viet. c. 61 (Bills of Ex- 
change Act, 1882), s. 4 271 n. 

s. 23 ...591 n. 
s. 62 ... 272 

52 & 53 Viet. c. 45 (Factors Act, 

1889), s. 10 392, 412 . 

53 & 54 Viet. c. 39 (Partnership 

Act, 1890), s. 1 (2) 661 

s. 2 (2) 614 

s. 2 (3). ..620, 621, 622 
s. 4, sub-s. 2 ... 617 

s. 9 226 n. 

s. 14 624 M., 625 n. 

s. 14 (2) 625 

s. 15 635 

s.16 635 

s. 17 202, 629 



PAGE 

53 & 54 Viet. c. 39 (Partnership 
Act, 1890) continued. 

s. 18 651 

s. 23 647 n. 

s. 24 (2) 295 n. 

s. 24(3) 642 

s. 24 (9) 646 

s. 27 648 

s. 31 644 n. 

s. 35 647 

s. 36(3) 625,652 

s. 38 635 

s. 41 647 

s. 44 643 

s. 52 (9) 649 

55 Viet. c. 9 (Gaming Act, 1892) 188 

56 & 57 Viet. c. 71 (Sale of Goods 

Act, 1893) 345, 393, 403 n. 

s. 2 54, 57 

s. 4 353 ,, 376 n. 

s. 10 251 

s. 11 420 n. 

s. 14(1) 423,429 

s. 14 (2) 423 

s. 14(3) 422 

s. 15 424 

s. 16 350 

s. 17(3) 262 

s. 18, rule 5 (2)... 358, 
363 

s. 23 417 

s. 25 395, 413, 414 

s. 29 384 

s. 31 244 

s. 41 (2) 389 

s. 45 399 

s.46 406 

s. 47 392 

s. 47 (2) 408 

s. 48 407 

s. 50 (3) 436 n. 

s. 51 314 

s. 53 432 . 

s. 58 (1) 437 . 

s. 58 (3), (4) ...437 n. 

s. 79 :...393 n. 

7 Ed\v. VII. c. 24 (Limited Part- 
nership Act, 1907) 621 
c. 37 (Companies 
Act, 1907) 621 



ACTS OF THE GOVERNOR-GENERAL OF 
INDIA IN COUNCIL. 



[The list also includes a few Presidency Acts and .Regulations specially noted 
or discussed. Repealed Acts are not generally indexed. An exception is the 
Civil Procedure Code of 1882, which has been replaced so recently by the Code 
of 1908.] 



PAGE 
Administrator-General's Act, II. 

of 1874, s. 56 125 

Arbitration, IX. of 1899, ss. 2, 14 174 

ss. 2, 3 177 

Bengal Tenancy, VIII. of 1865 146 
- Regulation, III. of 1793, 

s. 21 4 

, III. of 1872, 

s. 6.- 122 

, V. of 1893, 

s. 24 122 

Bills of Lading, IX. of 1856 7, 402 

Bombay Town Duties, XIX. of 

1844 120 

Trustees, VI. of 1879... 400 

Carriers, III. of 1865 7 

s. 2 488 

s. 3 381 

ss. 6, 8 ... 488 

s. 9 491 

Civil Courts, Bengal, XII. of 

1887, s. 37 5 

, Bombay, Reg. IV. 

of 1827, s. 26 ... 5 

, Central Provinces, 

XX. of 1875, 

ss. 5, 6 5 

, Lower Burma, XI. 

of 1889, s. 4 5 

, Oudh, XVIII. of 

1876,s. 3 5, 85 

, Punjab, XII. of 

1872,s.5 6 

Civil Procedure, XIV. of 1882, 

s. 29 229, 230 n. 

s. 32 230,231 

s.39 520 

s. 99 (a) 459 

s. 153 229 

s. 257 (a) 121, 147, 462 

s. 310 (a) 301 

s. 375 125 

s. 492 * 123 

s.503 125 

s. 506 520 

ss. 521, 523, 524 173 

Sched. IV., Nos. 113,132, 133 6G1 



PAGE 

Civil Procedure, 1908, 0. l,r. 6... 229, 

230 

r. 10 230, 

231, 234 

0. 6, r.8... 144 

0. 8,r. 2... 144 

0. 9,r. 5... 459 

O. 15, r. 2 229 

0.21, r. 2 175 

r. 89 301 

O. 23, r. 3 125, 

174 n. 

0. 30, r. 4 234 
0. 40, r. 1 660 
Sched. II., 
cl. 15, 17, 

19 173,177 

Coinage, XXXIII. of 1870, 

ss. 1214 215 

Companies, VI. of 1882, ss. 11, 

39, 67 52, 350 

Contract (Amendment), VI. of 

1899, s. 3 98 

s. 4 323 

s.23 121 

Contracts with Artificers, XIII. 

of 1859 7 

Criminal Procedure, X. of 1875, 

s. 505 120 

, V. of 1898, 

s. 107 120 

s. 345 131 

ss. 517,519... 416 
Dekkhan Agriculturists' Relief, 

XVII. of 1879, s. 72 455,456 

Drainage, Bengal, VI. of 1880 ... 123 
, II. of 1902 ... 123 

Emigration, XXI. of 1883 7 

Estates, XVI. of 1882, s. 8 122 

Evidence, I. of 1872, s. 3 190 

s.13 9 

s.16 32 

ss. 1723 635 

s. 18 607 

s.38 110 

s. 91 52, 629 

s. 92 590, 629 



Ivi 



ACTS OF THE GOVERNOR-GENERAL OF INDIA. 



PAGE 
Evidence, I. of 1872 continued. 

s. 92 (1) ... 144 
s. 92 (4) ... 274 
s. 92(5) ... 8 
ss. 93 97.. 178 

s. 106 492 . 

s. 109 625 

s. Ill 76 

s. 114 ...32, 154 

s. 115 623 w. 

s. 117 500 

Excise, XII. of 1896 119 //, 

Factors, XIII. of 1840 (rep.) ... 513 

, XX. of 1844 (rep.), s. 4 405, 

418, 513, 515 

General Clauses, I. of 1868 417 

s.2(5), (6) 343 

, X. of 1897, s. 3 417 

Guardian and Ward, VIII. of 

1890, ss. 29, 30 122 

Interest, XXXII. of 1839 7,318 

Legal Practitioners, XVIII. of 

1879 56f> 

Limitation, XV. of 1877, 

s. 19 52, 158 

s.20 446,512 

art. 57 512 

art. 59 455, 485 

art. 60 485 

art. 115 512 

art. 145 513 

Limitation Act, 1908, s. 3 277 >i. 

Sched. I., 
art. 106... 660 it. 
Sched. I., 
art. 114... 277 n. 
Local Act, No. 1 of 1900, s. 47... 281 

Lotteries, V. of 1844 (rep.) 195 

Madras Civil Courts, III. of 1873, 

s. 16 5 

Madras Regulation, II. of 1802, 

s. 17 5 

Majority, IX. of 1875, ss. 2, 3 ... 54 

s. 2 73 

s. 64 55, 56 

ss.2, 10... 55 
Married Women's Property, III. 

of 1874, ss. 4, 7 60, 522 

Merchandise Marks, IV. of 1889, 

s. 17 422 

Merchant Shipping, I. of 1859... 7 

, V. of 1883... 7 

Municipal, Bombay, II. of 1884, 

s. 30... 273, 282 

-, Madras, IV. of 1884 341 

,Oudh,XV.ofl883,s.40 281 

Negotiable Instruments, XXVI. 

of 1881 7, 350 

s. 4 179?*. 

s.20 67,70 

s.27 521 74.. 591 

s.28 590 

s.39 469 

s. 58 417 

s. 82 275 

ss. 87 89 270, 271 

s. 90.... , 275 



PAGE 

Negotiable Instruments, XXVI. of 
1 881 continued. 

B. 105 238 

s. 113 225 

s.114 471 

s. 118 154 

Paper Currency, XX. of 1882, 

s. 16 215 

, VI. of 1903,8.2 215 

Penal Code, XLV. of 1860, 

s.23 72 

s.40 417 

s. 52 417 

ss. 213,214 131 

s. 269 256 

s. 294 (a) 180 

s. 403 298 

(Amendment), XXVII. 

of 1870, s. 10 195 

s. 294 195 

Policies of Insurance, V. of 1866 7 

Powers of Attorneys, VII. of 1882 526 
Probate and Administration, V. 

of 1881, s.89 204 

Provincial Insolvency, 1907 209 

Railways, IX. of 1890, s. 55 509 

s.3,cl.6...490. 

ss. 72, 73 381, 

490, 498 n. 

s.76 491 

Registration, III. of 1877, 

s.17 52 

s. 32 520 

s. 49 52, 265 

Rent Recovery, Bengal, X. of 

1859, s. 10 120 

. N.-W.P.,XVIII. 

of 1873,8. 9... 122 



, XI I. of 1881, 



122 
s 34 319 

Revenue, N.-W . P., XIX. of 1 873, 

s. 125 122 

Securities, XIII. of 1886, s. 5 ... 237 

Specific Relief, I. of 1877, 

s. 13 108,256,371 

s. 14 100,219 

s. 16 104, 257 

s. 18 99 

s. 19 (a) of 1872 104 

s.21 176, 177, 178 

s. 21 (b) 206 

s. 24 219 

s. 25 162 

s. 26 (a), (b), (c) 103, 108 

s. 26 (e) 264 

s. 28 (a) 103, 108, 161, 162 

s. 28 (b) 103 

s.31 103, 108 

s. 35 (a) 103, 104, 144 

s. 35 (b) 280 

s. 38 104, 276 

s.41 56,276 

s. 57, illust. (d) 166 

s. 57, illust, (e) 165 

s. 65 108 

Stamp Act, II. of 1899 159 



ACTS OF THE GOVERNOR-GENERAL OF INDIA. 



Ivii 



PAGE 

Succession, X. of 1865,s. 2 60 

s. 4 60 

s.256.. .107, 341 
s. 268 ... 204 
s. 331 ... 60 

Tenancy, Agra, II. of 1901, s. 21 122 
Transfer of Property, IV. of 1882 7 

s.2, cl.(h) 121 

s. 3 488 

s. 4 10,147, 154, 281 

s. 6(e) 133 

s. 6 (f), (h) 121, 143,144 

ss. 25 34 201 

s. 35 276 

s. 49 439 n. 

s. 53 91, 125,162 

P. 54 52, 154, 344, 371 

s. 55 90 

s. 55 (g) 98 n. 

s. 55(5) (c) 371 

s. 58 268 n. 

s. 59 52 

s. 76, cl. (a) 492 

s. 86 7, 302 

s. 88 7 

s. 107..., 52 



PAGE 

Transfer of Property, IV. of 1882 
continued. 

s. 108 256, 280,281 

s. 118 344 

s. 123 52 

s. 127 628 

s. 130 207 

s. 137 418 . 

ch. viii 265 

,11. of 1900 207 

Trusts, II. of 1882, ss. 3, 4 144, 147 

s. 5 52 

s. 47 532 

s. 53 78 

ss. 5154 ... 560 

s. 64 417 

ss. 6365 ... 498 

s. 66 496 

s. 67 632 

s. 84 280 

Usury, XXVIII. of 1855 7 

s. 2. ..328, 334, 335, 336, 337 

Wagers, XXI. of 1848 (rep.) 187, 

194 . 

, Bombay, III. of 1865, 

ss. 1, 2 187 



BEFERENCES AND ABBEEVIATIONS. 



[In citing Indian cases the names of parties are necessarily given as they 
appear in the report. The capricious and often barbarous variations in the 
usage of the different High Courts make it difficult to avoid minute errors in 
reproducing them, but it is hoped that, if any have escaped revision, they are 
not such as to cause any trouble in identifying the oases.] 

Anson on Contract, llth ed. 1906. 

Chalmers, Sale of Goods Act, 1893, 5th ed. 1902. 

Dicey, Conflict of Laws, 2nd ed. 1908. 

Finch, Sel. Ca., A selection of cases on the English law of contract, by G. B. 

Finch, 2nd ed. 1896. 

Harriman on Contract, 2nd ed. (Boston, Mass.), 1901. 
Langdell, A Summary of the Law of Contracts, by C. C. L., 2nd ed. (Boston, 

Mass.), 1880. 

L. Q. E. Law Quarterly Review, cited by volume and page. 
Leake on Contracts, 5th ed. 1906. 
Lindleyon Partnership, 7th ed. 1905. 
Pollock on Contract, 7th ed. 1902. 
Pollock on Partnership, 8th ed. 1905. 
E. R., The Revised Eeports. 

Sm. L. C., Smith's Leading Cases, llth ed. 1903. 
Stokes, Whitley Stokes, The Anglo-Indian Codes. 1887. 



ADDENDA. 



P. 101, 1. 18: For "just possible" read "not altogether improbable": 
see Mahomed Kala Mea v. Harperink (1908) L. R. 36 Ind. Ap. 32, 
which suggests, though it does not decide, that the exception to s. 19 
will be applied if possible in a sense consistent with the English rule. 
At all events a buyer at a sale under the direction of the Court is 
entitled to rely on statements made by the auctioneer in the presence 
and hearing of the chief clerk in charge, which he has no means of 
checking on the spot, though he might have corrected them if he had 
made independent inquiries. The reading out of conditions in 
English does not constitute means of discovering the truth for a buyer 
who does not understand English. This was a remarkable case, the 
judgment below (Chief Court of Lower Burma) being described by the 
Judicial Committee as a lamentable miscarriage of justice : L. It. 36 
Ind. Ap. at pp. 35, 36, 37. 

S. 20, p. 107, footnote (jj) : Substitute " 35 Gal. 955, L. R. 35 Ind. Ap. 
109," for "12 Cal. W. N. 802." 

S. 23, p. 126, 1. 26: Add after the words "cannot be recovered": 
Likewise money advanced by the plaintiff to the defendant to enable 
the defendant to continue cohabitation with a dancing girl cannot be 
recovered back : Pannichand v. Nanoo San her (1908) 18 Mad. L. J. 
456. 

S. 23, p. 126, footnote (#) : Add Sani Muncharam v. Regina Stanger (1908) 
32 Bom. 581, at p. 586 et seq. 

S. 23, p. 139 : It has recently been held by a Full Bench of the Madras 
High Court that an agreement to make a payment to a father in 
consideration of his giving his daughter in marriage is immoral and 
opposed to public policy within the meaning of this section : VenJcata 
Kristnayya v. Lakxhmi Narayana (1908) 18 Mad. L. J. 403. 

S. 23, p. 142, 1. 3 from bottom: Add after the words "opposed to public 
policy " : And it has recently been held by the High Court of Calcutta 
that " if a person enters into a contract with a public servant which 
he knows casts upon the public servant duties which may conflict 
with the duties he owes to the public such contract is void " : The 
Sitarampur Coal Co., Ltd. v. Collet/ (1908) 13 Cal. W. N. 59. 



Ixii ADDENDA. 

S. 24, p. 147, footnote (kk), Laxmanlal v. Mulshankar : Substitute " 32 

Bom. 449 " for " 10 Bom. L. R. 553." 
S. 25, p. 151, 1. 3 : Add in a footnote after the words " followed by the 

Indian Courts" : see Olati Pulliah Chetti v. Varadarajulu (1908) 31 

Mad. 474, at pp. 47G, 477. 
S. 25, p. 159, 1. 1 : Add after the words "or to a promise " : The Court 

has in each case to consider the language of the document which is 

the basis of the suit : see Gobind Das v. Sarjn Das (1908) 30 All. 268. 



THE INDIAN CONTRACT ACT 

(ACT IX OF 1872). 



WHEREAS it is expedient to define and amend certain 
parts of the law relating to contracts : It is 

Preamble 

hereby enacted as follows : 

PRELIMINARY. 
1. This Act may be called the Indian Contract Act, 

Short title. 1872. 

Extent. It extends to the whole of British India ; 

Commencement, and it shall come into force on the first day of 

September, 1872. 

The enactments mentioned in the schedule hereto are 

Enactments re- repealed to the extent specified in the third 

column thereof ; but nothing herein contained 

shall affect the provisions of any Statute, Act or Kegulation 

not hereby expressly repealed, nor any usage or custom of 

trade, nor any incident of any contract, (a) not inconsistent 

with the provisions of this Act. 

Law anterior to Contract Act ; Introduction of English Law into 
India. The charters of the eighteenth century which established Courts of 
justice (&) for the three presidency towns of Calcutta, Madras, and Bombay, 

() The words "not inconsistent with by the Supreme Court in 1773, and finally 

the provisions of this Act " are not to be by the High Court in 1862. The Mayors' 

connected with the clause " nor any usage Courts in Madras and Bombay were re- 

or custom of trade" : Irrawaddy Flotilla placed, in 1797, by the Recorders' Courts. 

Co. v. Jtugwaiidas (1891) L. R. 18 Ind. Ap. The Recorder's Court in Madras was 

121, 127; 18 Cal. 620, 627. See p. 8, abolished in 1799, and that in Bombay in 

below. 1823, and a Supreme Court was established 

(b) These were at first the Mayors' in its stead, which again was superseded 

Courts, which, in Calcutta, were superseded by a High Court in both places in 1862. 

I.C. 1 



THE INDIAN CONTRACT ACT. 



S. 1. introduced into their jurisdictions the English common and statute law in 
force at the time (c) so far as it was applicable to Indian circumstances (d). 
It is, however, a matter of controversy whether English law was introduced 
by the charter of 1726 (13 Geo. I.) so as to extend to India the statutes 
passed up to that date only, or subsequently also by the charters of 1753 
and 1774 so as to embrace statutes up to 1774 (e). 

Introduction of native Law of Contract into India. The indiscrimi- 
nate application of English law to natives of India within the jurisdiction 
of the Supreme Courts led to many inconveniences (/). To obviate this, the 
statute of 1781 (21 Geo. III. c. 70, s. 17) empowered the Court at Calcutta 
(being then the Supreme Court), and the statute of 1797 (37 Geo. III. 
c. 142, s. 13) empowered the Courts in Madras and Bombay (being then the 
Recorders' Courts), to determine all actions and suits against the inhabitants 
of the said towns, provided that their succession and inheritance to lands, 
rents, and goods, and all matters of contract and dealing between party and 



(c) Though this view of the introduction 
of English law into India was pronounced 
incorrect and unreasonable by the Indian 
Law Commissioners in their celebrated 
lex loci Keport of 31st October, 1840, it 
may now be taken as an accepted doctrine. 
The Commissioners maintained that 
neither the Hindu nor the Mahornedan 
law was the lex loci of British India, as it. 
was so interwoven with religion as to be 
unfitted for persons professing a different 
faith, and they held that, there being no 
lex loci, the English law became Ipxojure 
the lex loci when any part of British 
India became a possession of the British 
Crown, and binding upon all persons who 
did not belong to the Hindu or Maho- 
medan community. They recommended 
the passing of an Act declaring a lex loci 
for British India founded on the English 
law, but the recommendation was never 
carried into effect. See in this connection 
Naoroji v. Rogers (1867) 4 B. H. C. 1, 
172(5 ; The Indian Cliief (1801) 3 Robin- 
son Adm. pp. 28, 29, where Lord Stowell 
showed a much juster understanding than 
the Indian Law Commissioners of the 
nature of Asiatic personal law ; and the 
cases cited in the next note. 

(<T) Thus it has been held that the 



Statute of Mortmain, 9 Geo. II. c. 36, 
does not apply to India (Mayor of Lyons 
v. East India Co. (1836) 1 M. I. A. 175 ; 43 
R. R. 27, 83) ; similarly the law as to for- 
feiture for suicide (Adv. -Gen. of Bengal 
v. Ranee Surnomoye Dossee (1863) 9 
M. I. A. 391) and the law as to mainten- 
ance and champerty (.Rant Coomar v. 
Chunder Canto Mookerjee (1876) L. R. 4 
Ind. Ap. 23) do not apply to India, as 
not being applicable to Indian circum- 
stances. 

(e) This question has now only an 
historical interest, derived from the trial 
and conviction of Nuncomar under the 
English statute of 1728 (2 Geo. II. c. 25). 
According to the view that only the 
statutes up to 1726 were introduced into 
India, the conviction under the statute of 
1728 would be illegal. It would, however, 
be legal according to the other view, and 
that view was maintained by Sir James 
Stephen in his Nuncomar and Impey, 
vol. ii. See Ilbert on the Government of 
India, pp. 34, 35. 

(/) Cowell's Tagore Law Lectures, 3rd 
ed. p. 55. Under the regulating Act of 
1773, the Supreme Court of Calcutta 
practically exercised a general jurisdic- 
tion over the whole of Bengal. 



NATIVE LAW OF CONTRACTS. 

party, should be determined in the case of Mahomedans by the laws and S. 1. 
usages of Mahomedans, and in the case of Gentoos (Hindus) by the laws 
and usages of Gentoos, and where only one of the parties should be a 
Mahomedan or Gentoo by the laws and usages of the defendant (g). 
The effect of these statutes was to supersede English law so far as regards 
Hindus and Mahomedans in the case of contracts and other matters 
enumerated in the statutes, and to declare the right of Hindus and 
Mahomedans to their own laws and usages. The result was that in 
a suit on contract, for instance, between Hindus, the Hindu law of 
contract was applied, and the Mahomedan law in the case of a contract 
between Mahomedans, and this continued up to the enactment of the 
Indian Contract Act. 

Native Law of Contracts as administered by High Courts. The 
statute of 1781 applied to the Supreme Court at Calcutta, and the statute 
of 1797 applied to the Kecorders' Courts in Madras and Bombay. Neither 
of these statutes is repealed, though the Courts to which they were applicable 
have been abolished. In 1862 High Courts were established for each of 
the presidency towns of Calcutta, Madras, and Bombay, but the same 
personal law continued to be administered to Hindus and Mahomedans, 
and is administered to them even at the present day subject to legislative 
enactments. Turning to matters of contract, the Hindu law of contract 
was in fact applied by the High Courts in the exercise of their original 
jurisdiction to Hindus, and the Mahomedan law to Mahomedans, up to 
the passing of the Contract Act in 1872, although the Courts to which 
the statutes of 1781 and 1797 were applicable had been abolished. The 
preservation of this jurisdiction appears to be accounted for by the 
charters of the High Courts. Taking the case of the Calcutta High 
Court, the combined effect of the Letters Patent of 1862 (cl. 18) and of 
the amended Letters Patent of 1865 (cl. 19) (h) was to render it incumbent 
upon the High Court to apply in the exercise of its ordinary original civil 
jurisdiction the same law or equity that would have been applied by the 
Supreme Court. Now, the law or equity applied by the Supreme Court 
being under the statute of 1781 the Hindu law of contract to Hindus, and 
the Mahomedan law of contract to Mahomedans, the provision in that 
statute for applying the native law of contract to natives became incor- 
porated by implication in the charters of 1862 as well as 1865, and in this 

(g) For similar Indian enactments, see William in Bengal in the exercise of its 

note (111) at p. 5, post. ordinary original civil jurisdiction, such 

(A) " And we do further ordain that, law or equity shall be the law or equity 

with respect to the law or equity to be which would have been applied by the 

applied to each case coming before the said High Court to such case if these 

said High Court of Judicature at Fort Letters Patent had not issued." 

12 



THE INDIAN CONTRACT ACT. 

S. 1. manner that provision came to have effect iu the High Court. This was, 
however, suhject to the legislative powers of the Governor-General in 
Council, as provided by the forty-fourth clause (*') of the charter of 1865. 
The Indian Legislature had, therefore, the power to alter by legislative 
enactment the provisions of cl. 19 of the charter, and this is done in the 
case of contracts by the Indian Contract Act. The result is that notwith- 
standing the provisions of cl. 19 of the charter of 1865, which directs the 
High Court to apply the same law or equity that would have been applied 
by the Supreme Court (i.e., to apply, inter alia, the native law or contract 
to natives), the High Court has now to administer the law as laid down in 
the Indian Contract Act, whether the parties to the suit be Hindus, 
Mahomedans, or otherwise (7c). In other words, the " law or equity " 
required to be administered by the High Court under cl. 19 of the 
amended Letters 'Patent is, in matters of contract, modified by the Indian 
Contract Act and other enactments relating to particular contracts. 
Subject, however, to any law made by the Governor-General in Council, 
the High Courts are still bound, in the exercise of their ordinary original 
civil jurisdiction, to apply the native law of contract to natives as comprised 
in the expression " law or equity " in cl. 19. 

As respects the High Courts in Madras and Bombay, the statute of 1797 
contained a provision similar to that of the statute of 1781 for applying 
Hindu law to Hindus and Mahomedan law to Mahomedans. The statute 
of 1797, however, applied to the Recorders' Courts in Madras and Bombay. 
Those Courts were superseded by a Supreme Court in Madras in 1799, and 
in Bombay in 1823. The charter of the Supreme Court of Madras 
(cl. 22) and that of the Supreme Court of Bombay (cl. 18) contained 
similar provisions for the application of Hindu and Mahomedan law. The 
" law or equity " administered by the Supreme Courts in Madras and Bombay 
thus consisted in the application of Hindu law to Hindus and Mahomedan 
law to Mahomedans, and the same " law or equity " is directed to be applied 
by the High Courts in Madras and Bombay, by virtue of their charters (which 
closely resemble those of the Calcutta High Court), to cases coming before 
those Courts in the exercise of their ordinary original civil jurisdiction. 

Law administered in Mufassal Courts. The old Bengal Regula- 
tion III of 1793 (s. 21) directed the Judges in the Zilla and City 

(<) " And we do further ordain and cases of emergency under the provisions 

declare that all the provisions of these of an Act of the twenty-fourth and 

our Letters Patent are subject to the twenty-fifth years of our reign, chapter 

legislative powers of the Governor-General sixty-seven, and may be in all respects 

in Council, exercised at the meetings for amended and altered thereby." 

the purpose of making laws and regula- (&) See Mad/nib Chunder v. Rajcoomar 

tions, and also of the Governor-General in Dess (1874) H B. L. R. 76. 



APPLICABILITY OF THE ACT. 

Courts, in cases where no specific rule existed, to act according to justice, S. 1. 
equity, and good conscience. Similar provisions occurred in the Madras 
Regulation II of 1802, s. 17. Both these regulations are now repealed, 
but the direction to act, in the absence of any specific rule, according to 
justice, equity, and good 'conscience, still retains its place in the Bengal 
Civil Courts (Act XII of 1887, s. 37) and in the Madras Civil Courts (Act 
III of 1873, s. 16). 

As to the Courts in the Mufassal of Bombay, the Bombay Regulation IV 
of 1827, s. 26, which is still in force, provides that the law to be observed 
in the trial of suits shall be Acts of Parliament and Regulations of Govern- 
ment applicable to the case ; in the absence of such Acts and Regulations-, 
the usage of the country in which the suit arose ; if none such appears, the 
law of the defendant, and in the absence of specific law and usage, equity 
and good conscience. 

The expression "justice, equity, and good conscience" has been 
interpreted to mean the rules of English law so far as they are applicable 
to Indian society and circumstances (/). This expression also occurs in 
Indian Acts relating to civil Courts in other parts of British India (m). 

Applicability of the Act. The second clause of s. 1 of the Act says in 
the most general terms that the Act is to extend to the whole of British 
India. These words are large enough to include all Courts and persons of 
all denominations. The third clause of s. 1 provides that nothing con- 
tained in the Act shall affect the provisions of any statute not thereby 
expressly repealed. The schedule of the Act enumerates the enactments 
repealed by the Act, but this enumeration does not include the provision 
in the statutes of 1781 and 1797 directing Hindu law to be applied to 
Hindus and Mahomedan law to Mahomedans. This circumstance gave 
rise, in Madhub Chunder v. Rajcoomar Doss (), to a question as to the 

(T) Waghela Rajsanji v. Shekh Masludln naturally interpret " them "as meaning 

(1887) L. K. H Incl. Ap. 89, 96 ; 11 Bom. such rules of English law as he happened 

551, 561 ; Dada v. Babaji (1865) 2 B. H. to know and considered applicable to the 

C. 36, 38 ; Webbe v. Lester (1865) 2 B. H. case" : Ilbert, Government of India, 2nd 

C. 52, 56. ed. 330. Thus the Common Law has 

(/) Act XII of 1887, s. 37 (Bengal, acquired in India a kind of moral pre- 
North- Western Provinces, and Assam) ; dominance like that which Koman law 
Act IV of 1872, s. 5, as amended by obtained, under the name of " written 
Act XII of 1878 (Punjab) ; Act XX of reason," in various regions of Continental 
1875, ss. 5, 6 (Central Provinces) ; Act Europe where it was not recognised as 
XVIII of 1876, s. 3 (Oudh) ; and Act XI having positive authority, especially in the 
of 1889, s. 4 (Lower Burma). Originally customary law provinces of France under 
the words were synonymous with the the old monarchy. Cp. Pollock, The Ex- 
rules of natural reason, or the law of pansionof the Common Law, pp. 132 134. 
nature; but "an Englishman would () (1874) H B. L. R. 76. 



THE INDIAN CONTRACT ACT. 

S. 1. applicability of the Contract Act to Hindus in cases coming before the High 
Court in the exercise of its original civil jurisdiction. The parties to the suit 
were Hindus, and the case came before the High Court of Calcutta in the 
exercise of its original civil jurisdiction. On behalf of the plaintiff it was con- 
tended that the Contract Act did not apply, and that the case was governed, 
as provided by s. 17 of the statute of 1781, by the Hindu law of contract, 
which, it was alleged, did not render an agreement in restraint of trade void, 
as was done by s. 27 of the Act. It was, however, held that the Act did 
apply to Hindus, having regard to the general words used in cl. 2 of the 
section ; as respects the non-repeal of the statute of 1781, it was said that 
it was not necessary to repeal it, as the Supreme Court to which it applied 
had been abolished, and there was nothing left to which it could apply. 

Scope of the Act. The Contract Act does not profess to be a complete 
code dealing with the law relating to contracts. As appears from the pre- 
amble, the Act purports to do no more than define and amend certain parts of 
that law. No doubt it treats of particular contracts in separate chapters, but 
there is nothing to show that the Legislature intended to deal exhaustively 
with any particular chapter or subdivision of the law relating to contracts (0). 
How far native Law of Contracts is still in force. As stated above, 
the Contract Act does not cover the whole field of contract law. In cases, 
therefore, not provided for by the Contract Act or other legislative enact- 
ments relating to particular contracts, it is incumbent upon the High 
Courts, in the exercise of their original jurisdiction, to apply the Hindu 
law of contract to Hindus and the Mahomedan law of contract to Maho- 
medans. This is because of the provisions of the charters of those Courts 
noted at pp. 3, 4, ante, which substantially continued the direction in this 
respect of the Acts of 1781 and 1797 (p). As an instance of the above 
proposition may be mentioned the rule of the Hindu law of contract 
known as damdupat, according to which interest exceeding the amount of 
the principal cannot be recovered at any one time (q). This rule is still 
in force in the Bombay Presidency (r) and in the presidency town of 

(0) Irrawaddy Flotilla Co. v. Bug wan- (q) See The Kule of Damdupat, by 

<7a*(1891) L. R. 18 Ind. Ap. 121 ; 18 Cal. Framjee R. Vicajee, in Journ. Soc. Comp. 

620, 628, 629. Leglsl. for December, 1900, at p. 464. 

(p) It will be seen from what is said (r) Dhondu v.Narayan (1863) 1 B. H. 

above that the statement in Ilbert, C. 47 ; Khushalchand v. Ibrahim (1866) 

Government of India, 2nd ed. p. 327, is 3 B. H. C. A. C. 23 ; Nathubhai v. 

not formally accurate so far as it implies Mulchand (1868) 5 B. H. C. A. C. 196 ; 

that these provisions are still in force by Halt ma Manjl v. Neman Ayab (1870) 7 

virtue of the Acts themselves: yet in Bom.H. C. 0. C. 19 ; Paranagav. C/ovind 

Madhwa Sldhanta v. Venkataramanjulu (1873) 10 Bom. H. C. 382 ; Ramchandra 

(1903) 26 Mad. 662, 670, the Act of 1797 v. Bldmrav (1877) 1 Bom. 577 ; Ganpat 

was assumed to be still in force. v. Adarji (1877) 3 Bom. 312 ; Dawood v. 



NATIVE LAWS I USAGE OF TRADE. 

Calcutta (s), but it is not recognised outside that town () or in the Madras S. 1. 
Presidency (u). The rule would, however, appear to be abrogated by the 
Transfer of Property Act, 1882, so far as regards interest on mortgages 
governed by that Act (see ss. 8G, 88) (x). Another instance is the rule 
applicable to Hindus governed by the Mitakshara law in the Bombay 
Presidency, that in the case of a debt wrongfully withheld after demand of 
payment has been made, interest becomes payable from the date of demand 
by way of damages. This rule, according to the Bombay High Court, is 
not affected either by the Interest Act, 1839, or by the Contract Act (y). 
The rule, however, is not applied to Hindus in the Madras Presidency (yy}> 
But such cases are very few, and the native law of contract may, for all 
practical purposes, be regarded as having been superseded by the Contract 
Act and other enactments relating to particular contracts. 

Acts and Regulations not expressly repealed. The laws made by the 
Legislatures for the presidencies of Bengal, Madras, and Bombay, before the 
date of the Government of India Act of 1833 (3 & 4 Will. IV. c. 85), 
were known as " Eegulations." The statute of 1833 established a legis- 
lature for the whole of British India, and the laws made under that 
statute, and the subsequent enactments modifying that statute, are known 
as " Acts." As regards the Regulations, it may be stated that a major 
part of them has been repealed by subsequent Indian legislation. Among 
the Acts relating to particular contracts and not expressly repealed by the 
Contract Act may be mentioned the following : Act XXXII of 1839 as to 
interest, Act XXVIII of 1855 as to usury, Act IX of 1856 as to bills 
of lading, Act XIII of 1859 as to breaches of contracts by artificers, 
the Merchant Shipping Acts of 1854 and 1859, Act III of 1865 as to 
contracts with common carriers, and Act V of 1866 as to assignment of 
policies of insurance. The Acts enumerated above were passed before the 
enactment of the Contract Act. Among the Acts dealing with particular 
contracts and passed after that date may be noted the Negotiable Instru- 
ments Act XXVI of 1881, the Transfer of Property Act IV of 1882, 
Merchant Shipping Act V of 1883, Act XXI of 1883 as to contracts with 
emigrants, and Act IX of 1890 as to contracts with railways. 

Saving of usage or custom of trade, etc. The term " usage of trade " 

Vullubhdas (1893) 18 Bom. 227; Gopaly. (u) Annaji Rou v. Ragubai (1883) 6 

Gangaram (1895) 20 Bom. 721, overruling Mad. H. C. 400. 

Shri Ganesh v. Kesliavrav (1890) 15 Bom. (x) Madkwa Sidhanta v. Verikatara- 

625 ; Harilal v. Nagar (1896) 21 Bom. 38 ; manjulu (1903) 26 Mad. 662. 

All Saheb v. Shabji (1895) 21 Bom. 85. (y) Saunadanappa v.SMvbagawa(l9Q7) 

(*) Nobin Cli/under v. Homes/i CJiunder 31 Bom. 354. 

(1887) 14 Cal. 781. (yy} Subramania Aiyarv. Subramania 

(0 Het Narain v. Ram, Deni (1883) 12 Aiyar (1908) 18 Mad. L. J. 245. 
C. L. R. 590. 



THE INDIAN CONTRACT ACT. 

S. 1. is to be understood as referring to a particular usage to be established by 
evidence, and perfectly distinct from that general custom of merchants 
which is part of the law of the realm and is to be collected from decisions, 
legal principles, and analogies, and, according to the better opinion, can 
still be increased by proof of living general (not merely local) usage (2). 
Such a usage remains unaffected by the provisions of the Act, even though 
it may be inconsistent with those provisions. Both the reason of the thing 
and the grammatical construction of the section require that the words 
"not inconsistent with the provisions of this Act" should not be connected 
with the clause " nor any usage or custom of trade," and apply only to the 
immediately preceding words " nor any incident of any contract." This 
view was taken by the Judicial Committee in the Irrawaddy Flotilla 
Co. v. Bugwandas (a). The contrary seems to have been assumed by 
the Bombay and Calcutta High Courts in two earlier cases (ft). Both 
these cases were considered by the Judicial Committee in the above case. 
In both these cases, again, the opinion was expressed by the Bombay and 
Calcutta High Courts that the liability of a common carrier under the 
common law of England, which renders him liable for all loss or damage 
to goods except when caused by the act of God or the King's enemies, was 
a " usage of trade," the one Court holding that it was inconsistent, and 
the other that it was consistent, with the provisions of the Contract Act. 
In the Privy Council case cited above, the Judicial Committee were 
inclined to the opinion that the liability of a common carrier under the 
English common law as an insurer of goods was not a usage of trade, 
but that it was an " incident " of the contract quite consistent with the 
provisions of the Act. Such an incident is not inconsistent with the 
provisions of ss. 151 and 152 of the Act, having regard to the words " in the 
absence of any special contract " occurring in s. 152. All these cases are 
considered more fully in the notes to s. 151. See also as to "usage of 
trade " in the case of High Court attorneys s. 171 and In re Mccorkin- 
dale (c), there cited. 

Evidence as to usage of trade. In this connection may be noted the 
provisions of s. 92 (5) of the Indian Evidence Act, 1872, which enacts 
that, though a contract may be in writing, oral evidence may be adduced 
to prove any usage or custom by which incidents not expressly mentioned 

(z) See 1 Smith's Leading Cases, 483 ; (J) Kuverji v. Tlie Great Indian Penin- 

Beckuanaland EujAoratw* Co. v. London sula Railway Co. (1878) 3 Bom. 109, 

Trading Sank [1898] 2 Q. B. 658; 113 ; Moothora Kant Shaio v. The India 

Edelstein v. Scliuler % Co. [1902] 2 K. B. General Steam Navigation Co. (1883) 10 

144 ; F. B. Palmer in L. Q. R. XT. 245. Cal. 166, 185. 

() (1891) L. R. 18 Ind. Ap. 121 ; 18 (<) (1881) 6 Cal. 1. 
Cal. 620, 627 ; L. R. 18 Ind Ap. 121, 127. 



USAGE OR CUSTOM OF TRADE. 

in the contract are usually annexed to contracts of that description, pro- S. 1. 
vided that the annexing of such incident would not be repugnant to, or 
inconsistent with, the express terms of the contract. And further such 
incident should not be inconsistent with the general provisions of the 
Contract Act, having regard to the words " nor any incident of any 
contract not inconsistent with the provisions of this Act." This is a 
reproduction of the English law on the subject (d). As to the evidence 
necessary to prove a usage of trade, it is enough if it appears to be so well 
known and acquiesced in that it may be reasonably presumed to have 
been an ingredient imported by the parties into their contract. To prove 
such a usage, there needs not either the antiquity, the uniformity, or the 
notoriety of custom in its technical sense ; the usage may still be in course 
of growth, and may require evidence for its support in each case(e). See 
also Evidence Act, s. 13 (b). 

Sections referring to usage or custom of trade. S. 110 provides that 
an implied warranty of goodness of quality may be established by the 
11 custom of any particular trade." S. 190 enacts that an agent cannot 
delegate his authority to another unless allowed by the " ordinary custom 
of trade." Similarly an agent is bound, in the absence of directions from 
the principal, to conduct business according to " the custom which prevails 
in doing business of the same kind at the place where the agent conducts 
such business" (s. 211). It may here be observed that the expression 
" usage or custom of trade " used in s. 1, as well as the sections referred to 
above, relates to a particular usage as distinguished from a general or 
universal usage. A general usage pervading ail trades has no binding 
force, if it is inconsistent with the provisions of the Act. A general usage 
is equivalent to a general law, and no general law or usage in contravention 
of the general law laid down by the Contract Act can be consistent with 
the validity of the Act itself (/). 

Choice of law governing contract. It may be doubtful what law is to 
be applied to decide on the validity or the interpretation of a contract, or 
both, as where the contract is made in one jurisdiction and to be performed 

(d) Per Cur. in Brown v. .Z?//?'e(1855) (/) Moothora Kant Shaw v. The India 
3 E. & B. 715, 23 L. J. Q. B. 316 ; aud in General Steam Navigation Co. (1883) 10 
Humfrey v. Dale (1857) 7 E. & B. 274, 26 Cal. 166, 185. See also Meyer v. Dresser 
L. J. Q. B. 137, 140. (1863-4) 16 C. B. N. S. 646; 33 L. J. 

(e) Jiigyomohun Ghose v. Manlcltchand C. P. 289, where Erie, C.J., said : "It is a 
(1859) 4 W. R. 8, 10 ; 7 M. I. A. 263, 282. contradiction to say the law does not give 
The allowance of new usage involves ths the right, and yet that there is a univer- 
possibility of allowing change in previous sally established usage to allow it. A 
usage : Moult v. Halllday [1898] 1 Q. B. universal usage cannot be set up against 
125, 130. the general law." 



THE INDIAN CONTRACT ACT. 

Ss. 1, 2. in another, or is sued on in a jurisdiction where it was not made or to be 
performed. The Act does not deal with questions of this kind. 

In ordinaiy circumstances the proper law of a contract (to use 
Mr. Dicey's convenient expression) will be the law of the country where it 
is made (g). But where a contract is made in one country and to be per- 
formed wholly or in part in another, the proper law may be presumed to be 
the law of the country where it is to be performed (A). 

But these rules are only in the nature of presumptions, and subject to 
the intention of the parties, whether expressly declared or inferred from the 
terms and nature of the contract and the circumstances of the case ('). 
The subject cannot be discussed at large here ; the above rules, however, 
are settled and willcommonly be found sufficient. 

Generally the capacity to contract follows the law of domicile at the 
time of making the contract (&). This of course is a matter of law which 
the parties cannot alter. A large proportion of the decisions under this 
head have been in matrimonial causes ; but the special complications 
arising in questions of marriage and divorce are outside the scope of the 
present Act and of the ordinary law of contract (I). 

Act not retrospective. The provisions of this Act do not apply to 
contracts made before the Act came into force (m). 

The Transfer of Property Act IV of 1882, s. 4, provides that the 
chapters and sections of that Act which relate to contracts shall be taken 
as part of the Contract Act. 

2. In this Act the following words and expressions are 
interpretation use ^ m ^ ne following senses, unless a contrary 
intention appears from the context. 

(0) Dicey, Conflict of Laws, 2nd ed., erroneous). 

Rule 152, sub-r. 3 ; Lloyd v. Guibert (A) LacUmi Nara'm v. Fatah Bahadur 

(1865) L. R. 1 Q. B. 115, 122 (in Ex. (1902) 25 All. 195; Dicey, Rule 149. 

Ch., a classical judgment of a very strong (1) See Ogden v. Ogdtn [1908] P. 46, 

Court delivered by Willes, J.). C. A. 

(A) Ibid.; Cox v. The Governors of (/) OmdaKhanum v. Brojendro (\1 ) 

Bishop Cotton's School (1874) Punj. Rec. 12 B. L. R. 451, 458 ; ib. p. 472 (on 

No. 85. appeal), where A. sued B. upon a contract 

(1) Dicey, Rule 152, sub-rr. 1 and 2 : executed by B. in 1869 providing for 
Hamlyn v. Talislter Distillery [1894] payment of interest on the amount of a 
A. C. 202 is now the leading English loan at the rate of 75 per cent, per annum, 
authority. And see Abdul Aziz v. On behalf of B. it was contended that the 
Appayasaml (1903) 27 Mad. 131, 31 I. A. 1 case was governed by the Contract Act, 
(parties bound according to the law as ss. 73,_ 74, and 75, but the Court intimated 
they understood and adopted it at the their opinion that the Act had no retro- 
time, though their interpretation proved spective effect. 



INTERPRETATION. 1 1 

(a) When one person signifies to another his willingness S. 2. 

to do or to abstain from doing anything, with a 
view to obtaining the assent of that other to 
such act or abstinence, he is said to make a 
proposal : 

(b) When the person to whom the proposal is made 

signifies his assent thereto the proposal is said to 
be accepted. A proposal, when accepted, becomes 
a promise : 

(c) The person making the proposal is called the 

" promisor, "and the person accepting the proposal 
is called the " promisee " : 

(d) When, at the desire of the promisor, the promisee 

or any other person has done or abstained from 
doing, or does or abstains from doing, or promises 
to do or to abstain from doing, something, such 
act or abstinence or promise is called a considera- 
tion for the promise : 

(e) Every promise and every set of promises, forming 

the consideration for each other, is an agreement : 

(f) Promises which form the consideration or part of the 

consideration for each other are called reciprocal 
promises : 

(g) An agreement not enforceable by law is said to be 

void : 

(h) An agreement enforceable by law is a contract : 
(i) An agreement which is enforceable by law at the 

option of one or more of the parties thereto, but 

not at the option of the other or others, is a 

voidable contract : 
(j) A contract which ceases to be enforceable by law 

becomes void when it ceases to be enforceable. 

Summary of S. 2. This section is understood to be the work of Sir 
James Stephen. There is nothing like it in the original draft prepared by 
the Indian Law Commissioners at home, which only laid down in general 
terms that " a contract is an agreement between parties whereby a party 



THE INDIAN CONTRACT ACT. 

S. 2. engages to do a thing or engages not to do a thing "(). As the section 
stands, its position and form are open to the remark that it professes to be 
an interpretation clause, but really declares a considerable part of the sub- 
stantive law. Moreover, the propositions it lays down are by no means 
confined to principles of universal jurisprudence, but embody several con- 
ceptions which are peculiar to the Common Law, or of peculiar importance 
in it. We learn from els. (a), (b), (c), (e), and (f) that an agreement is a 
promise or a set of reciprocal promises ; that a promise is formed by the 
acceptance of a proposal ; and that there must be a promisor who makes the 
proposal and a promisee who accepts it. In the case of reciprocal promises 
each party is a promisor as to the promise he makes and a promisee as to 
that which he receives ; he is both proposer and acceptor, proposing to 
become liable and accepting the other's liability. The mutual proposals of 
the two parties become promises by mutual acceptance ; whatever may 
have happened before the promises are exchanged is merely preliminary 
negotiation, and does not enter into the legal analysis of the transaction. 

Proposal and promise. The word "proposal" is synonymous in 
English use with " offer." But the language of these definitions appears to 
confine " proposal " to an offer to be bound by a promise. Thus a man 
who offers to sell and deliver, then and there, existing portable goods in his 
immediate control, such as a book or a jewel, does not offer a promise but 
an act, and if the other party takes the goods on the spot and becomes 
liable to pay for them, he (the buyer) is the only promisor (0). In such a 
case the seller would seem not to make a proposal within the terms of the 
Contract Act. But in England no one would hesitate to say that he offers 
(or proposes, though this word is less usual) to sell his goods. 

The Act does not say, but it seems to imply, that every promise is an 
accepted proposal. In the Common Law this is not so, for a binding 
promise may be made by deed, that is, by writing under seal, without any 
communication between the parties at all. This is because the deed, as an 
ancient formal method of proof, was conclusive against its maker. It was 
introduced at a time when, under the archaic procedure still in force in the 
eleventh and twelfth centuries, all proof had to be conclusive or nothing. 
The party's solemn admission that he was bound originally excluded all 
defence. It still dispenses, in England, with positive proof of any ulterior 
ground of liability (p). But the practice of executing deeds in the English 

() S. 1 of draft Second Report of qualification that specific performance of 

Indian Law Commissioners, 1866, at p. 11. a merely voluntary covenant will not be 

(</) We assume for simplicity's sake granted. In most American jurisdictions 

that there is no question of warranty, as the peculiar law concerning the form and 

in fact there often is none. effect of deeds has been altered by 

(ji) This is subject to the important legislation. 



PROMISE AND CONSIDERATION. 13 

form and the legal doctrines exclusively applicable to such instruments have S. 2. 
never been introduced in India. "We have, therefore, no occasion to dwell 
on them here. There is nothing analogous to them in the provision of our 
Act (s. 25, sub-s. 1, p. 148, below) for sanctioning certain voluntary agree- 
ments by registration. It is also difficult at first sight to say, without doing 
some violence to language, that in the common affairs of life a promise is 
always an accepted proposal. Take the case of a man offering to sell and 
deliver goods on credit, then and there, to another who at first does not 
want the goods, but is finally persuaded to take them at a price named by 
the seller. Here the seller delivers the goods and receives in exchange the 
buyer's promise to pay for them. Now the buyer's promise has never been 
a proposal ; the seller offered to sell, and the buyer accepted the offer by 
taking the goods and pledging his credit. It may be said, however, that 
the buyer must be deemed to adopt the seller's terms at the last moment 
before delivery of the goods. For the seller will not deliver them unless 
he knows that he will get the buyer's promise to pay for them ; and 
the only way in which he can be sure of this is the existence of a proposal 
from the buyer. to become liable for the price, which proposal will become 
a promise on the goods being delivered. Further, it may be said that this 
is the only way in which the promise can really be simultaneous with the 
performance for which it is exchanged, as the theory of the Common Law 
requires it to be. Both these reasons (though the force of the latter appears 
to be destroyed in British India by sub-s. (d), as we shall see) appear to be 
sound, and sufficient on principle to justify the language of the Act. The 
case of mutual promises will be considered when we come to it under 
sub-s. (d). 

Promise and Consideration. Again, the technical use of the word 
" promise " in the Act is far narrower than the popular use. Express 
words of promise may be and often are in law no more than a proposal (<?). 
In common life many promises are made, and regarded as morally binding 
between one person and another, without any " view to obtaining the assent 
of that other" to the contents of the promise. In common speech no one 
thinks of acceptance by the promisee as being an essential condition which 
must be satisfied before a declaration of intention amounts to a promise. 
It may be asked, then, why the word " promise " should not have retained 
its literal and proper meaning, and further why all deliberate promises 
should not be binding, subject to necessary exceptions and regulations. 

(q] Thus a letter requesting a loan of loan : Dhondbkat v. Atmarain (1889) 13 

money, and promising repayment with Bom. 669; Narayanasami v. Loltaiti- 

interest on a certain dav, is not a pro- Ittlaminttl (1897) 7 Mad. L. J. 220. 
missory note but a mere proposal for a 



14 THE INDIAN CONTRACT ACT. 



S. 2. For example, a promisor could not be held to remain bound if the promisee 
refused to accept ; and some rules of evidence would be required by way of 
caution, so that men should not be burdened by legal obligations in conse- 
quence of hasty or trifling words which the other party had no moral right 
to take seriously. The answer is that the way thus suggested has indeed 
been taken by other systems of law, and especially the modern Roman law, 
which has been adopted on the continent of Europe and in the kingdom of 
Scotland, but the Common Law has taken a distinct road of its own. 
Apart from the peculiar case of a promise made by deed, English law will 
not enforce a promise unless it was given for value, that is, not necessarily 
for an adequate value, but for something which the law can deem of some 
value, and the parties treat as such by making it a subject of bargain. 
The value so received in exchange for the promise may consist in present 
performance, for example the delivery of goods, or it may itself be the 
promise of a performance to come. These elements are embodied in the 
definition of Consideration by cl. (d) of our section. This clause is 
especially open to the remark that what purports to be interpretation of 
terms is really substantive enactment. Only in s. 25, however, with partial 
anticipations in ss. 10, 23, and 24, does it appear for what purpose the 

- 

notion and definition of consideration have been introduced. 

Definition of Consideration. The terms of the Indian definition must 
now be examined. They do not appear to follow those of any authoritative 
English exposition ; they expand, with only verbal difference, those of one 
of the explanations in the Commissioners' original draft (r). Whether it 
was so intended by the framers or not, some of the terms are capable, in 
their literal meaning, of restoring a doctrine which was long ago finally 
disallowed in England, and, moreover, they have been held to have that 
effect. We take the material phrases in order. 

" At the desire of the promisor." The act constituting the considera- 
tion must have been done at the desire or request of the promisor. An act 
done at the desire of a third party is not a consideration. Thus a promise 
by the defendants to pay to the plaintiff a commission on articles sold 
through their agency in a market constructed by the plaintiff, not at the 
desire of the defendants, but of the collector of the place, is void under 
s. 25, being without consideration (s). Nor can it be supported under 
cl. 2 of that section, which enacts that an agreement without consideration 

(/) S. 10, expl. 3 : " A good considers- or to abstain from doing." None of the 

tion must be something which at the illustrations show any intention to alter 

desire of the person entering into the the modern common law. 

engagement another person \_N.B.~\ has (*) Durga Prasad v. Saldeo (1880) 3 

done or abstained from doing, or does or All. 221. 
abstains from doing, or promises to do 



CONSIDERATION MUST BE AT PROMISOR'S DESIRE. 15 



is void, unless it is a promise to compensate a person who has already S. 2. 
voluntarily done something for the promisor. The expression "volun- 
tarily " appears to be used in contradistinction to the words " at the desire 
of the promisor " (f). In this case, even if the market were not established 
by the plaintiff at the desire of the defendants, the agreement would be 
binding, provided it was done by the plaintiff voluntarily for the defen- 
dants. The Court, however, found that the market was not constructed 
by the plaintiff for the defendants so as to bring the case within the pro- 
visions of s. 25, cl. 2. 

Questions may sometimes arise whether the thing done by the plaintiff 
claiming under a promise was in fact done at the desire of the promisor. 
The Commissioners of the Howrah Municipality created themselves by 
deed trustees for the purpose of building a town hall in Howrah and 
inviting and collecting subscriptions for that purpose. The defendant was 
a subscriber to this fund of Rs 100, having signed his name in the sub- 
scription book for that amount. As soon as the subscriptions allowed, the 
Commissioners, including the plaintiff, who was also vice-chairman of the 
municipality, entered into a contract with a contractor for the purpose of 
building the town hall. The defendant not having paid his subscription, 
a suit was brought against him by the plaintiff on behalf of himself and 
all the other Commissioners who had rendered themselves liable to the 
contractor, after leave to sue had been obtained under s. 30 of the Code of 
Civil Procedure (u). It was held that the suit would lie, as there was a 
contract for good consideration. It was stated in the course of the 
judgment that the subscribers knew the purpose to which the subscriptions 
were to be applied, and also knew that on the faith of their subscription an 
obligation was to be incurred to pay the contractor for the work (#). In 
fact, the act of the plaintiff (promisee) in entering into the contract with 
the contractor may be said in this case to have been done at the desire of 
the defendant (promisor), so as to constitute a consideration within the 
meaning of the section for the promise to pay the subscription. If there 
were no contract with the contractor, or if no liability had been incurred 
and nothing substantial had been done on the faith of the defendant's 
promise, the promise to pay the subscription would have been without 

() Sindha Shri Ganpatsingji v. Abra- tion of Order XVI., rule 9, of the English 

ham (1895) 20 Bom. 755, 758. Rules of Court. 

() S. 30 of the Code provides that (x) Ke&ar Nath v. Gorie Mahomed 

where there are numerous parties having (1886) 14 Cal. 64. The statement of the 

the same interest in one suit one or more facts in the body of the report is (as is 

of such parties may, with the permission too commonly the case in Indian reports) 

of the Court, sue on behalf of all parties inadequate, 
so interested. This section is a reproduc- 



16 THE INDIAN CONTRACT ACT. 



S. 2. consideration, and therefore void. No similar decision is known to have 
been given in England, and it seems doubtful whether there was really a 
sufficient request by the defendant to the plaintiff and those whom he 
represented. It would seem to follow that in the opinion of the Calcutta 
High Court every promise of a subscription to a public or charitable object 
becomes a legal promise, and enforceable by the promoters, as soon as any 
definite steps have been taken by them in furtherance of the object and on 
the faith of the promised subscriptions. Such is certainly not the general 
understanding of the profession in England (y). 

" Or any other person." In modern English law it is well settled that 
consideration must move from the promisee (z). Under the Act, however, 
consideration may proceed from the promisee or any other person. The 
result, according to the decisions now to be cited, is to restore and even 
extend the doctrine of some earlier English decisions which are no longer 
of authority in England. In Dutton v. Poole (a), decided so far back as 
1088, where the father of a bride was about to fell timber on his estate to 
provide a marriage portion for her, and refrained from doing so on the 
eldest son promising to pay the amount to her, it was held that the daughter 
could maintain an action against the son on the promise to the father. It 
will be observed that no consideration proceeded from the daughter. She 
was not a party to the contract, and the whole consideration moved from 
the father. On the faith of the son's promise, the father abstained from 
felling the timber, and as a result the estate with the timber descended to 
the son as the heir-at-law. The ground of the decision was that, having 
regard to the near relationship between the plaintiff (daughter) and the 
party from whom the consideration moved (father), the plaintiff might be 
considered a party to the consideration. That is to say, a stranger to the 
consideration could, by construction of law, be regarded as a party to it, 
if he was closely related to the person from whom the consideration actually 
proceeded. But this decision is no longer law in England, and was finally 
set aside by Tweddle v. AfJcinson (b). In that case, decided in 1861, an 

(y) There is some American authority of the promisee, and as the agreed equiva- 

(seemingly not in any of the Courts whose lent for the promise ; and, with this 

decisions carry most weight outside their meaning, the rule seems to import no 

own jurisdiction) in favour of this view : more than is necessarily implied in the 

Harriman on Contracts, 2nd ed. (1901), conception of a consideration as an essen- 

s . 129. tial part of the agreement" : Leake, Law 

(.-) " The meaning of this rule seems to of Contracts, 5th ed. (1906), p. 431. 

be that the matter of the consideration (a) 2 Lev. 210. 

must be given, done, or suffered by the (&) 1 B. & S. 393. See especially the 

promisee himself, or, if by a third party, judgment of Crompton, J. 
at the request and by the procurement 



CONSIDERATION FROM THIRD PERSON. 17 



agreement was entered into between the respective fathers of a husband S. 2. 
and wife that each should pay a sum of money to the husband, and that the 
husband should have full power to sue for such sums. After the death of 
both the contracting parties the husband sued the executors of the wife's 
father upon the above agreement, but the action was held not to be main- 
tainable. The husband was a stranger to the consideration, and the plea 
of nearness of relationship to the contracting parties was regarded as of no 
consequence. As to Dutton v. Poole, it was said that there was no modern 
case supporting that decision, and its authority was treated as overruled. 
It may now be taken as an established rule of English law that a third 
party cannot sue on a contract though made for his benefit, and the nearness 
of relationship cannot be invoked to import what may be called constructive 
consideration. However, the case of Dutton v. Pooh was relied on, and 
Tweddlev. Atkinson distinguished, by Innes, J., in Chinnaya v. Ramayya(c), 
in the High Court of Madras. In that case, A., by a deed of gift, made 
over certain property to her daughter, with a direction that the daughter 
should pay an annuity to A.'s brother, as had been done by A. On the 
same day the daughter executed a writing in favour of the brother agreeing 
to pay the annuity. The daughter declined to fulfil her promise, and the 
brother sued the daughter to recover the amount due under the agreement. 
On behalf of the daughter it was contended that no consideration proceeded 
from the brother, and that he, being a stranger to the consideration, had 
no right to sue. Inues, J., held, following Dutton v. Poole (d), that the 
consideration indirectly moved from the brother to the daughter, and that 
he was, therefore, entitled to maintain the suit. Tweddle v. Atkinson was 
distinguished upon the ground that in that case no consideration proceeded 
either directly or indirectly from the husband, as he was not worse off from 
the non-fulfilment of the promises than he would have been if they had not 
been made. It does not appear probable that this ingenious attempt to 
save the authority of Dutton v. Poole would be supported in an English 
Court. On the other hand, it seems that Dutton v. Poole would be good 
law in British India under the present section. In the Madras case now 
referred to, Kindersley, J., preferred, in fact, to rest his judgment upon the 
terms in which this section defines "consideration." Both in Dutton v. 
Poole and the Madras case the consideration proceeded from a third party 
and the plaintiff was a near relation of that party. But though nearness of 
relationship was the specific ground upon which the English case proceeded, 
under the Act it is a factor of no consequence. Under the present section, 
consideration may proceed from a third party, whether or not he be related 
to one or both of the parties to the contract made for his benefit. In a 

(c) (1881) 4 Mad. 137. (<0 (1688) 2 Lev. 210. 

I.C. 2 



18 THE INDIAN CONTRACT ACT. 

S. 2. later Madras case (e), the administratrix of the estate of a deceased person 
agreed to pay one of the heirs of the deceased his full share of the estate if 
the heir gave a promissory note for a proportionate part of a barred debt 
due to a creditor of the estate. The heir executed a promissory note in 
favour of the creditor, gave it to the administratrix, and received his full 
share in the estate. In. a suit by the creditor against the heir on the note, 
it was held that the act of the administratrix in handing over to the heir 
his share of the estate without deducting any portion of the debt constituted 
consideration for the heir's promise to the creditor, and that the creditor 
could recover upon the note. It will be observed that here there was no 
nearness of relationship between the creditor and the administratrix from 
whom the consideration proceeded. And it will also be observed that in 
both the Madras cases the suit must have been dismissed if it had to be 
decided according to the modern English law. 

There is one feature common to the cases cited above, excepting 
Tweddle v. Atkinson, namely, some detriment to the plaintiff by reason of 
the act of the party from whom the consideration moved caused by the 
representation of the defendant. Thus in Dutton v. Poole it was the 
deprivation of the marriage portion which was to be given by the father 
to the daughter ; in Chinnaya v. Ramayya it was the deprh'ation of the 
annuity which was paid by the sister to the brother ; and in the other 
Madras case it was the deprivation of the debt which the administratrix 
wanted to pay to the creditor, though time-barred. But the section does 
not render the presence of any detriment to the plaintiff an element essential 
to constitute consideration. Thus in Tweddle v. Atkinson, though the 
action brought by the plaintiff was held not to be maintainable, it would 
be otherwise under the Act. The promise given by the plaintiff's father 
to pay to the plaintiff would be sufficient consideration to support the 
promise given by the wife's father, though no detriment may have accrued 
to the plaintiff. In Price v. Easton (f), Easton promised A. that if A. 
would do certain work for him, he would pay Price the amount which A. 
owed to Price. The work was done, and Price sued Easton for the money. 
It was held that the action would not lie, as no consideration moved from 
Price. The result would be otherwise on that point, if the case arose 
under the Act ; for the act of A. working for Easton would constitute 
consideration under the section, though it moved from a third party. 

In all the above cases, it will be observed that the act constituting the 
consideration proceeded at the request of the defendant. But the section 
also requires that a promise should be the result of a proposal and acceptance 

(e) Samuel v. Ananthanatha (1883) 6 (/) (1833) 4 B. & Ad. 433. 
Mad. 351. 



CONSIDERATION. 

passing between the promisor and the promisee. There must be by S. 2. 
sub-ss. (a), (b), (c), a proposal from the defendant to the plaintiff, and 
a communication of the proposal to, and its acceptance by, the plaintiff, 
although a consideration which does not move from the plaintiff may be 
enough to support the promise. This requirement does not appear to have 
been regarded in the two Madras cases cited above, for in neither of them 
was there any bargain or communication at the time between the supposed 
promisor and promisee. It is submitted, therefore, that these cases are of 
doubtful authority. Chinnaya v. Ramayya seems to have been really, in 
substance, not a case of contract at all. The transaction was a transfer of 
property, subject to a charge in favour of a third person. 

But where a contract between A. and B. is intended to secure a benefit 
to C. as a cestui que trust, C. may sue in his own right to enforce the trust. 
And this seems to be the principle underlying the recent decision in 
Husaini Begam v. Khtvaja Muhammad Khan (y}. In that case 0. sued 
her father-in-law, A., to recover arrears of an annuity payable by A. to C. 
under an agreement made between A. and C.'s father in consideration of 
C.'s father consenting to her marriage (C. being then a minor) with A.'s 
son. It was contended on behalf of A. that C. could not sue upon the 
contract, as she was no party to the agreement. But this condition was 
overruled, and the suit was decreed. The Court said : "The document 
was executed in pursuance of an agreement entered into between A., the 
father of the intended husband, and the father of the plaintiff, who was a 
child of tender years at the time. In consideration of the agreement^ the 
father and guardian of the plaintiff allowed the marriage to take place, and 
on the faith of it the marriage between the girl and Eustam Khan was 
consummated. The document provides that the plaintiff shall have power 
to recover the amount of the annuity, and she is expressly named in the 
document as the person for whose benefit the agreement was executed. 
Under circumstances such as these it is idle, we think, to put forward the 
plea that the plaintiff cannot take advantage of a document which was 
executed solely for her benefit " (h). 

Similarly, where on a partition between a Hindu son and his father it 
was arranged that the father should remain in possession and management 
of the share of the property allotted to the son and maintain the son's wife 
and his children out of it, it was held that the wife, though not a party to 
the arrangement, was entitled to sue the father for the maintenance of herself 
and her children ('). The wife and children, though not named as parties 

O) (1906) 29 All. 151. same class. 

(A) Page v. Cox (1852) 10 Ha. 163, 90 (i~) lialthmabai v. Go find (1904) G 

R. R. 314, is an English case really of the Bom. L. R. 421. 

2- 2 



THE INDIAN CONTRACT ACT. 

S. 2. to the contract, possessed an actual beneficial right which placed them in the 
position of cestuis que trust under the contract (Ic). " Though the plaintiffs 
are not named parties to the contract, yet they are not in that sense strangers 
to the consideration of the contract so as to prevent them from suing on it in 
their own name as to such part as is for their benefit and on their behalf " (/). 
Past Consideration. In the same clause the words "has done or 
abstained from doing" call for special attention. They declare the law to 
be that an act done by A. at B.'s request, without any contemporaneous 
promise from B., may be a consideration for a subsequent promise 
from B. to A. Now, the general principle of the common law is 
that in the formation of a contract the consideration is given and accepted 
in exchange for the promise. Hence the acceptance of the consideration 
and the giving of the promise must be simultaneous, and, in order to have 
the effect of binding the party making it, a request must be the offer of a 
promise in return for some consideration, which offer will become a promise 
(if not meanwhile revoked) (w) if and when the consideration is furnished 
as requested. Thus the consideration must always be present at the time 
of making the promise, and there is no such thing as a past consideration. 
If a service is rendered without any immediate promise or understanding 
that it is to be recompensed, it is a merely gratuitous act having no legal 
effect except such transfer of property or the like as may be contained in 
the act itself. If there be such a promise, express by words or tacit by 
understanding to be inferred from the circumstances, there is at once an 
agreement, in which, if the recompense be not specified, the promise is to 
give such reward as may be found reasonable. A subsequent promise 
specifying the reward will not make an obligation where there was none 
before, but will show what the parties thought reasonable ; and there is 
generally no reason why the parties' own estimate, in a matter which con- 
cerns only themselves, should not be accepted. Such a promise "may be 
treated either as an admission which evidences, or as a positive bargain 
which fixes, the amount of that reasonable remuneration on the faith of 
which the service was originally rendered" (ti). In many common circum- 
stances the fact of service being rendered on request is ample evidence of 
an understanding that it was to be paid for according to the usual course. 

The use of the perfect tense in the clause now under consideration 
embodies in the law of British India the exception to the general rule 

(/O Gandy v. Gandy (1885) 30 Oh. D. v. Jones $ Co. (1870) 7 Bom. H. C. 0. C. 

57 (a negative decision). We are not 144, at p. 148. 

aware that in England the doctrine has (?;t) As to revocation, see p. 33, below, 

ever been extended beyond marriage (M) Bowen, L.J., Re Casey's Patents 

settlements. [1892] 1 Ch. 104, 115. 

(1) Per Green, J., in Blackwell $ Co. 



PAST CONSIDERATION. 21 

which is supposed to have been made by the seventeenth-century case of S. 2. 
Lampleigh v. Brathivait (A.D. 1615) (0). There it was allowed that in 
general a service rendered without any agreement for reward at the time 
will not support a subsequent promise of reward " a mere voluntary 
courtesy will not have (p) a consideration to uphold an Assumpsit " but it 
was said that if the service was " moved by a suit or request " of the 
promisor, the promise " couples itself with the suit before," or, as we should 
now say, is held to relate back to the original request, and accordingly is 
deemed to be made on good consideration. 

It would seem that this fiction was really needless, and that the true 
account of such cases was given by Lord Bowen (following an earlier 
dictum of Erie, C.J.) in the passage above cited. Our Act has adopted the 
doctrine of Lampleigh v. Brathwait in its current form. We shall come to 
another exception from the general principle in s. 25, sub-s. (2), below. 
The manner in which the law of Consideration is split up between 
s. 2 and ss. 10, 23, 24, and 25 does not conduce to certainty in interpreting 
the intention of the Act as a whole on the subject. 

Indian Courts have here followed, as they were bound to do, the terms 
of the Act. In Sindha v. Abraham (q), the plaintiff rendered services to 
the defendant at his desire expressed during his minority, and continued 
those services at the same request after bis majority. The question arose 
whether such services constituted a good consideration for a subsequent 
express promise by the defendant to pay an annuity to the plaintiff. The 
agreement was one to compensate for past services, and it was held that it 
could be enforced, as the services formed a good consideration within the 
meaning of this section. The Court was of opinion that the services were 
intended to be recompensed, though the nature and the extent of the pro- 
posed recompense were not fixed until the agreement sued upon was 
executed by the defendant. If- so, there was a contract for reasonable 
recompense when the services were rendered, and the decision might have 
been put on that ground alone. It was chiefly rested, however, on the 
ground that, under the words of the present sub-section, services already 
rendered at the desire of the promisor and such services to be rendered stood 
upon the same footing. It would seem that, under the Act, the decision 
must have been the same on this ground even if the services were rendered 
at the time gratuitously, though at the desire of the defendant. It was also 
said that if the services had been rendered without the desire of the 
defendant the case would be within s. 25 of the Act (see below). As to 

00 Hob. 105 ; 1 Sm. L. C. 141. The O) Sic. One would expect " make." 
defendant's name is often miswritten in O/) (1895) 20 Bom. 755. 
various ways in modern books. 



THE INDIAN CONTRACT ACT. 

. 2L the conditions of suing in respect of services rendered by the plaintiff 
voluntarily without any request from the defendant, see s. 25 of the Act. 

"Or does or abstains from doing" : Forbearance as Consideration. 
The essence of consideration is that the promisee takes on himself some 
kind of burden, or " detriment," as the English authorities call it. Where 
the consideration is a present performance and not a promise (the only 
case now before us ; promise as a consideration will be dealt with under 
the following words of this sub-section) the detriment may consist either in 
actually parting with something, of value, or in undertaking a legal 
responsibility, or in foregoing the exercise of a legal right. It is not 
common experience that the exercise of one's legal rights is always 
profitable ; nevertheless that which the law deems worthy of its protection 
must be presumed to be of some value. Thus the performance which 
constitutes a consideration may be negative as well as positive, provided 
that the promisee's abstinence from exercising a right was undertaken at 
the request of the promisor. There need not be a total abandonment of 
the right, or an undertaking to suspend it for a definite time. Such an 
undertaking, if it exists, is of course not a performance, but a promise, and 
then the contract is formed by mutual or reciprocal promises (sub-s. (f); 
below). The class of cases now before us is that in which the defendant 
has requested the plaintiff to forbear the enforcement of a claim against 
him, and has offered a new promise in return, and the plaintiff, without 
any express acceptance of the defendant's terms, has in fact forborne for an 
appreciable time. Here the defendant's offer to pay or give security, or 
as the case may be (;), is accepted by the performance of its conditions 
(see s. 8, p. 45, below), and that performance is a good consideration for 
the defendant's promise. And where the defendant has made an offer 
to pay in consideration of forbearance, with some other alternative offer, 
the plaintiff's forbearing to sue in fact is a sufficient acceptance of the 
first alternative (s). A request to forbear suing or other proceedings, not 
specify ing any length of time, is understood to be a request of forbearance 
for a reasonable time ; ^,nd this is in fact a common case. If it is asked 
at what moment the proposal conveyed by such a request becomes a 
promise, the answer is that it does so whenever the other party has in fact 
forborne his rights for a time which the Court considers long enough to 
amount to a reasonable compliance with the request. This appears to 
be a question of fact depending on all the circumstances, for which no 
general rule can be laid down. No great difficulty is found, so far as we 

(/) See Alliance Sank v. Brown (1864) (*) Wilby v. Elgee (1875) L. R. 10 

2 Dr. & S. 289, Finch, Sel. Ca. 290, as a C. P. 497. 
good example of this class. 



FORBEARANCE AS CONSIDERATION. 

are aware, in dealing with it in practice. It will be found on examination S. 2. 
that in many of the cases where forbearance to sue is said to be the 
consideration for a promise, that which is really given and accepted as 
consideration is a promise to forbear suing either for a definite time or for 
a reasonable time according to the circumstances, which promise may be 
express or inferred from the transaction as a whole. Such cases really 
belong to the following head of contracts by mutual promises. Sometimes 
it is not easy to say whether, on the facts of a particular case, the 
consideration is actual forbearance or an agreement to forbear ; in other 
words, whether the promise sued upon was exchanged for a promise of 
forbearance, or was an offer to be accepted by forbearance in fact, and 
became a promise when its condition was fulfilled by the plaintiff's for- 
bearance for the specified time, if any, or otherwise for a reasonable time (t). 

Compromise. The most usual and important kind of forbearance 
occurring in practice is that which is exercised or undertaken by way of 
compromise of a doubtful claim. It is a question of some importance 
within what limits the abandonment or compromise of a disputed claim is 
a good consideration. But this seems to belong not to the definition of 
Consideration, but to the- substantive law declared in s. 25 of the Act. We 
shall therefore deal with it under that section. 

Apparent forbearance when really an act. Actual performance is 
sometimes apparently passive. A trader exposes his goods for sale, the 
price being marked or otherwise well known. A customer comes in, takes 
the object he wants, and gives his name to the trader. The case is 
common enough. Here a captiously literal person might say that the 
consideration on the trader's part is forbearing to interfere with the 
customer's action. But what we do say, both in law and in common sense, 
is that the seller, by authorising the buyer to take the goods within his 
reach, in fact sells and delivers them by the buyer's own hand, and the act, 
though mechanically the buyer's, is in substance the seller's. This remark 
is needed only when the sale is on credit. If ready money is expected and 
given, there is no promise at all in the transaction, and therefore n<\ 
contract ; see the commentary on the next following words. 

" Or promises to do or to abstain from doing something" : Mutual 
Promises. These words, supplemented by sub-ss. (e) and (f), convey in a 
somewhat indirect and inconspicuous manner the extremely important f 
proposition that a contract may be formed by the exchange of mutual 
promises, each promise being the consideration for the other. In this case 
neither promise is of any value by itself, but each of them derives its value 

(f) See per Bowen, L.J., in Miles v. jYeio Zealand Afford Estate Co. (1886) 32 
Ch. D. 266, 289. 



THE INDIAN CONTRACT ACT. 



S. 2. from the exchange which makes them both binding. This effect of mutual 

promises is not a logical deduction from the general notion of consideration, 

but a positive institution of law required by the convenience of business in 

civilised life. In many archaic systems of law there is no obligation to 

perform a promise until there has been performance or at least some act 

done towards performance on the other side. The widespread custom of 

[giving something by way of earnest " to bind the bargain " is a relic of 

\ this view. 

A consideration which consists in performance (or so far as it consists in 
performance) is said to be executed. If and so far as it consists in promise, 
it is said to be executory. Some writers, especially in America (), speak 
of a contract in which the consideration on one side is executed as unilateral, 
and of a contract in which it is executory on both sides as bilateral. This 
terminology is concise and convenient, but is not at present commonly 
used in England. It is obvious that the consideration cannot be wholly 
executed on both sides. For where performances, and performances only, 
are exchanged, of which a sale of goods over the counter for ready money 
is a familiar example, nothing remains to be done by either party, and there 
is no promise at all and nothing for the law to enforce (x). 

The proposal to give a promise for a promise is accepted by giving the 
promise asked for, and thereupon, if there be no special ground of invalidity, 
the two parties are both bound, each being both promisor and promisee. 
It does not seem necessary or useful or indeed true to say that the promise 
of the party who accepts has ever been a proposal, though the language of 
sub-s. (b) does not seem to recognise the existence of promises which have 
not passed through that stage. Still it is true that, but for the counter- 
promise or "reciprocal promise" as the Act has it, neither party's 
" signification of willingness " could become a promise within the definition 
of the Act ; and in this sense we may say, if we please, that the acceptance of 
an offered promise, by giving the reciprocal undertaking asked for, has itself 
the nature of a proposal, though it becomes a promise in the act of utter- 
ance, and there is no moment at which it exists merely as a proposal. But 
it does not appear that anything of practical importance can turn on this. 

Promises of Forbearance. An actual forbearance to exercise a right 
may be a good executed consideration, provided it be at the promisor's 
request. So a promise of forbearance may be a good executory consideration. 
The validity of such considerations, as distinct from their formal definition, 
will be spoken of, as above mentioned, under s. 25. 



(?/) See Langdell, Summary of the Law (./) The possible existence of a collateral 

of Contracts, s. 183 ; Harriman on Con- promise, e.g., a warranty on sale, does not 
tracts, passim. affect the general truth of this statement. 



GOOD OR VALUABLE CONSIDERATION. 25 

" Such act or abstinence or promise is called a consideration for S. 2. 
the promise " : Further Requirements. It will be observed that, accord- 
ing to the terms of the definition, it is only required that something no 
matter what should have been done, forborne, or promised at the request 
of the promisor. We shall find, however, that in some cases expressly 
provided for by the Act, and in others apparently not so provided for, but 
well known in the Common Law, and still recognised in Indian practice, 
the legal effect of consideration in making promises binding is withheld 
from acts, forbearances, and promises which are within the terms of the 
definition. English lawyers are accustomed to say, in some at least of such 
cases, that there is no consideration. This way of speaking would seem to 
be excluded by the Act. One would expect the Act to say somewhere that, 
in order to have legal effect, a consideration must not only be something 
which the promisor asked for and got, but must be " good " or " valuable " ; 
that is to say, something which not only the parties regard, but the law 
can regard, as having some value (y). This is a fundamental rule in the 
Common Law. Had the Act abrogated it, the consequences would have 
been extensive ; but it seems to be beyond doubt (notwithstanding the 
opinion expressed by Dr. Whitley Stokes, Anglo-Indian Codes, i. 497) that 
such was not the intention, and that the silence of the Act cannot be taken 
as altering the English law as it stood settled in. British India. The prin- 
ciple may be broadly expressed thus : The law will not enforce a promise 
given for nothing, and if it is apparent to the Court on the face of the 
transaction that an alleged consideration amounts to nothing (not merely 
to very little), then there is no foundation for the promise, and we say 
either that there is not any consideration or that there is an " unreal 
consideration." The Act does say in s. 10 that agreements are contracts, 
i.e., enforceable, if they are (amongst other conditions) made for a lawful 
consideration. In s. 23 it is declared that certain kinds of consideration 
are not lawful. In s. 25 agreements made without consideration are 
declared (special exceptions excepted) to be void. It is not anywhere 
stated in terms that consideration is not lawful, or otherwise not sufficient, 
if it is not " good " or " valuable " in the sense which those terms bear in 
English law. Further explanation is reserved for the commentary on the 
sections last mentioned. 

Sub-ss. (e) to (j) : Agreement and Contract. The group of sub-ss. 
(e) to (j) may be considered together. By sub-s. (e) an agreement is either 
a promise or a group of promises (z), and, therefore, it would seem that an 

(y) Good consideration was in fact (c) See Abaji v. Trimtalt Municipality 
required by the original draft of the Act (1903) 28 Bom. 66, at p. 72. 
(s. 10). 



6 THE INDIAN CONTRACT ACT. 

Ss. 2, 3. executed consideration is not reckoned as part of the agreement. This is 
not according to the current use of language, which treats an agreement 
as an act of both parties, whether a legal obligation is incurred by one or 
both of them. A unilateral contract is not the less a transaction between 
two parties to which both must contribute something. It would not be 
difficult, however, to find arguments for the language of the Act if required. 
Sub-s. (f) agrees with common usage, except that the adjective "mutual" 
is more common in English books. 

The distinction between " agreement " and " contract " made by 
sub-s. (h) is apparently original ; it is convenient, and has been adopted 
by some English writers. The conditions required for an agreement being 
enforceable by law are contained in Chap. II of the Act, ss. 10 sqq. 
(pp. 51 sqq., below), where it will also be seen that the absence of any 
such condition makes an agreement void, and certain defects will make a 
contract voidable. The duties of parties to a contract are set forth in 
Chap. IV of the Act. The manner in which contracts are, if necessary, 
enforced belongs to civil procedure. 

For technical reasons, the language of sub-ss. (g) and (i) would not be 
accurate in England ; it would be useless to dwell on this here. The state 
of things really indicated by sub-s. (i) is that one of the parties (or possibly 
more) can at his option maintain the contract, or resist its enforcement, or 
take active steps to set it aside. When rescinded by a party entitled to 
rescind, it becomes void. Nevertheless it is in the first instance a contract, 
being valid until rescinded. A contract obtained by fraud is the typical 
example of a voidable transaction. See RS. 19, 19A, 39 ; see also ss. 53, 55. 

CHAPTEK I. 

OF THE COMMUNICATION, ACCEPTANCE, AND KE VOCATION OF 

PROPOSALS. 

3. The communication of proposals, the acceptance of 
communication, proposals, and the revocation of proposals and 
revocation 6 of" 1 acceptances, respectively, are deemed to he 
proposals. made by any act or omission of the party pro- 

posing, accepting or revoking, by which he intends to 
communicate such proposal, acceptance or revocation, or 
which has the effect of communicating it. 

What is Communication ? As the words of this section stand, it would 
seem that some sort of communication of a proposal, etc., is made by an 



COMMUNICATION OF PROPOSAL. 27 

act which is intended to communicate it, but in fact has not that effect, S. 3. 
and that such an inchoate communication fails to have legal effect only 
because the specific provisions of s. 4 prevent it from being complete. It 
would seem both simpler and more rational to say that an act intended to 
communicate a proposal, etc., but failing to do so, is not a communication 
at all. To get this sense from the section before us we should have to read 
" and " for " or " in the last clause. There are not any corresponding words 
in the Commissioners' draft. 

It is matter of the commonest experience that the communication of 
intentions may be effectually made in many other ways besides written, 
spoken, or signalled words. For example, delivery of goods by their owner 
to a man who has offered to buy them for a certain price will be understood 
by every one, unless there be some indication to the contrary, to signify 
acceptance of that offer. No words are needed, again, to explain the intent 
with which a man steps into a ferry-boat or a tramcar, or drops a coin 
into an automatic machine. It is also possible for parties to hold com- 
munication by means of pre-arranged signs not being any form of cipher 
or secret writing, and not having in themselves any commonly understood 
meaning. This does not- often occur in matters of business. Means of 
communication which a man has prescribed or authorised are generally 
taken as against him to be sufficient. Otherwise an unexecuted intention 
to communicate something, or even an unsuccessful attempt, cannot be 
treated as amounting to a communication ; much less can a mere mental 
act of assent have suoh an effect in any case (a). 

Communication of special conditions. In recent times there has been 
a series of cases in which the first question is whether the proposal of special 
terms has been effectually communicated. This arises where a contract for 
the conveyance of a passenger, or for the carriage or custody of goods, for 
reward, is made by the delivery to the passenger or owner of a ticket con- 
taining or referring to special conditions limiting the undertaker's liability, 
and nothing more is done to call attention to those conditions. English 
authorities have established that it is a question of fact whether the person 
taking the ticket had (or with ordinary intelligence would have) notice of 
the conditions, or at any rate that the other party was minded to contract 
only on special conditions to be ascertained from the ticket. In either of 
these cases his acceptance of the document without protest amounts to a 
tacit acceptance of the conditions, assuming them to relate to the matter of 
the contract, and to be of a more or less usual kind. But he is not liable 

() Jirot/ticnv. Metrop.lt. Co. (1877)2 11 C. B. N. S. 869, Finch, Sel. Ca. 51, 
App. Ca. at pp. 691, 692, per Lord Slack- judgment of Willes, J. 
burn ; and see Fdthouse v. Bindley (1862) 



28 THE INDIAN CONTRACT ACT. 

S. 3. if the ticket is so printed, or delivered to him in such a state, as not to 
give reasonable notice on the face of it that it does embody some special 
conditions (b). In determining these questions the class of persons to 
whom the special conditions are offered, and the degree of intelligence to 
be expected of them, may properly be taken into account (c). 

So far as we know, there is only one Indian case bearing directly on the 
subject. The plaintiff in that case (d) purchased of the defendant company 
a ticket by steamer, which was in the French language. Towards the top 
of the ticket were words to the effect that " this ticket, in order to be avail- 
able, must be signed by the passenger to whom it is delivered." At the 
foot of the ticket there was an intimation in red letters that the ticket was 
issued subject to the conditions printed on the back. One of those condi- 
tions was that the company incurred no liability for any damage which the 
luggage might sustain. The vessel was wrecked by the fault of the 
company's servants, and the plaintiff's baggage was lost. The plaintiff 
sued the defendant company for damages. The ticket was not signed by 
him, and he stated that he did not understand the French language, and 
that the conditions of the ticket had not been explained to him. It was 
held that the plaintiff had reasonable notice of the conditions, and that it 
was his own fault if he did not make himself acquainted with them. The 
case of Henderson v. Stevenson (b) was distinguished on the ground that 
there the ticket did not disclose on the face of it that there were any 
conditions on the back, and the plaintiff had no notice of any such 
conditions. As to the absence of the plaintiff's signature, it was held that 
the clause requiring the passenger's signature was inserted for the benefit 
of the company, and that they might waive it if they thought fit. The 
decision seems also to imply that a French company is entitled to assume 
that persons taking first-class passages either know French enough to read 
their tickets or, if they do nob ask for a translation at the time, are willing to 
accept the contents without inquiry. This seems reasonable enough in the 
particular case. Quare, what presumption is there, if any, as to educated 

(ft) In Henderson v. Stevenson (1875) Co. (1877) 2 C. P. Div. 416. In Wailtins 

L. R. 2 Sc. & D. 470, where an endorsement v. By mitt, (1883) 10 Q. B. D. 178, the 

on a steamboat ticket was not referred to authorities down to that date are summed 

on its face, and Richardson v. Rowntree up. See Madras Railway Co. v. Gocinda 

[1894] A. C. 217, where the ticket was Ran (1898) 21 Mad. 172, 174. 

folded up so that no writing was visible (c) See Lord Ashbourne's remarks in 

without opening it, a finding of fact that Richardson v. Rowntree, last note, 

the passenger knew nothing of any con- (d) Macltlllican v. Compagnie de* Mes- 

ditions was supported. The correct form sagerleg Maritime* de France (1880) 6 

of putting the question of fact was laid Cal. 227. 
down by the C. A. in Parker v. S. E. R. 



NOTICE OF CONDITIONS. 29 

persons, European or otherwise, in British. India being acquainted with any Ss. 3, 4. 
particular language ? 

Incorporation of prospectus in a policy of assurance. In a recent 
Madras case (e\ the question as to the effect to be given to the prospectus 
of a company which was incorporated by reference in a policy of life assur- 
ance arose incidentally in connection with the onus of proof of age of the 
assured. In the course of the judgment, Bhashyam Ayyangar, J., said : 
"As regards the etf'ect to be given to the prospectus as a part of the 
contract of insurance, I think it will have the same effect as if it had been 
reproduced in the policy itself, and it is quite unnecessary to prove that the 
prospectus had been read by the assured or that it was specially brought to 
his notice by the company apart from the reference made to it in the policy 
itself. A policy of insurance being a contract entered into between the 
insurers and the assured, and the terms of such contract resting entirely 
upon the contract itself, and not in the main or even in part upon the 
common law or upon the statute, the assured, who makes the proposal, 
enters into the contract, and signs the policy, has in the very nature of 
things notice that the policy contains all the terms and conditions of the 
contract." The learned Judge proceeded to cite and rely on Watlcins v. 
Rymill (/) and the test there laid down (g) by Stephen, J. : " Can it be 
said that the nature of the transaction was such that the plaintiff might 
suppose not unreasonably that the document (handed to him) contained no 
terms at all, but was a mere acknowledgment of an agreement not intended 
to be varied by special terms ? " 

4, The communication of a proposal is complete when 
communication ^ comes to the knowledge of the person to 

when complete. wh()m it ig made 

The communication of an acceptance is complete, 
as against the proposer, when it is put in a course of 

transmission to him, so as to be out of the power of the 

acceptor ; 

as against the acceptor, when it comes to the knowledge 

of the proposer. 

The communication of a revocation is complete, 
as against the person who makes it, when it is put into 

0) Oriental Government Security Life (/) L. R. 10 Q. B. D. 178; note (*), 
Assurance Co., Ltd. v. Naraximha (1901) . p. 28, above. 
25 Mad. 183, 205, 206. (g) 10 Q. B. D., at p. 189. 



THE INDIAN CONTRACT ACT. 

4. a course of transmission .to the person to whom it is made, 
so as to be out of the power of the person who makes it ; 

as against the person to whom it is made, when it comes 
to his knowledge. 

Illustrations. 

(a) A. proposes, by letter, to sell a house to B. at a certain price. 

The communication of the proposal is complete when B. receives the letter. 

(b) B. accepts A.'s proposal by a letter sent by post. 
The communication of the acceptance is complete, 

as against A., when the letter is posted ; 

as against B., when the letter is received by A. 

(c) A. revokes his proposal by telegram. 

The revocation is complete as against A. when the telegram is despatched. 
It is complete as against B. when B. receives it. 



This section is really in the nature of an interpretation clause to s. f>, 
and might, perhaps, have more conveniently followed it. 

Agreement between parties at a distance. No difficulty arises on 
the first paragraph. Whether a proposal has or lias not come to the 
knowledge of the person to whom it was made is purely a question of fact. 
The rest of the section is intended, as shown by the illustrations, to meet 
the questions raised by the formation of agreements between parties at a 
distance. It has done this, as regards acceptance, by enacting (in com- 
bination with s. 5) that for a certain time namely, while the acceptance' is 
on its way the receiver shall be bound and the sender not. The proposal 
becomes a promise before it is certain that there is any consideration for it. 
This can be regarded only as a deliberate and rather large departure, for 
reasons of convenience, from the common law rule which requires the 
promise and the consideration to be simultaneous. No such departure has 
been found necessary in England. The case of an acceptance being " put 
in a course of transmission to " the proposer, but failing to reach him, is 
not expressly dealt with. It seems to result from the language of the 
second paragraph that the proposer must be deemed to have received the 
acceptance at the moment when it was despatched so as to be " out of 
the power of the acceptor," and that accordingly it becomes a promise on 
which the acceptor can sue, unless some further reason can be found why it 
should not. If the consideration on the acceptor's part was not promise 
but performance for example, the sale of goods despatched at the proposer's 
request without previous negotiation the failure of consideration may 
supply such a reason in the case proposed. The Act certainly does not say 
that the intending purchaser must be deemed to have received goods which 



COMMUNICATION WHEN COMPLETE. 31 

have never arrived ; it says at most that he must be deemed to have been S t 4. 
aware of their despatch. But if the consideration on the acceptor's part 
was a promise, it would seem that the proposer cannot say he has not 
received that consideration ; for he cannot say that the acceptance has not 
been communicated to him, and there is no difference between having the 
communication of a promise and having the promise itself. Consequently, 
where the agreement is to consist in mutual promises, a binding contract 
appears to be formed by a letter of acceptance despatched in the usual way, 
even if it does not arrive at all, unless the proposal was expressly made 
conditional on the actual receipt of an acceptance within a prescribed time, 
or in due course, or unless the" acceptor sends a revocation as provided for 
by the latter part of the section and explained by illustration (c). This 
J ast qualification is probably, though not certainly, a departure from 
English law. Apart from the question of a possible revocation, the total 
result, on the words of the Act, is in accordance with the existing English 
authorities. Those authorities, however, are of later date than our Act, 
and in 1872 the current of opinion was rather the other way. It seems 
uncertain whether the framers of the Act really omitted to consider the case 
of an acceptance not arriving at all, or meant it to be an implied exception, 
on the ground that the want of any final consent between the parties 
(see s. 10) would prevent the formation of a contract, or how otherwise. 
The draft of 1866 appears to have assumed that actual communication was 
necessary (K). When the proposal and acceptance are made by letters, the 
contract is made at the time when and the place where the letter of 
acceptance is posted (i). 

English, rules. The rules as now settled in England are as follows : 
" A person who has made an offer must be considered as continuously 
making it until he has brought to the knowledge of the person to whom it 
was made that it is withdrawn (&). In other words, the revocation of a 
proposal is effectual only if actually communicated before the despatch of 
an acceptance ; and the time when the revocation was despatched is 



(/t) " 3. A proposal to enter into a con- poser before or at the same time with the 

tract may be retracted, or the terms of it letter or telegram of acceptance, or when 

altered by the party making it, at any acceptance is to be inferred from the 

time before it is accepted. circumstances of the case." 

''Explanation. A proposal is said to be (<) Kamisetti Subbiak v. Katlia Ven- 

accepted when an expressed acceptance hatasawmy (1903) 27 Mad. 355. English 

of it has been communicated to the pro- authority, so far as it goes, is to the same 

poser, or when a letter of acceptance is effect. 

posted or a telegraphic message delivered (&) Lord Herschell in Ifenthorn v. 

at the proper office, and the acceptance by Fraser [1892] 2 Ch. 27, 31, Finch, Sel. Ca. 

letter or telegram is not cancelled by some 148, confirming Bijrw, v. Van Tienhoven 

communication which reaches the pro- (1880) 5 C. P. D. 344. 



THE INDIAN CONTRACT ACT. 

S. 4. immaterial (/). But where an acceptance, without notice of the offer being 
revoked, is despatched in due course by means of communication, such as the 
post, in general use and presumably within the contemplation of the parties, 
the acceptance is complete from the date of despatch, notwithstanding any 
delay or miscarriage in its arrival from causes not within the acceptor's 
control " (m). It seems (ri) this is independent of the rule that, if the 
proposer of an agreement has prescribed or authorised any particular mode 
of communicating acceptance (rf. s. 7, sub-s. 2), he cannot dispute the 
sufficiency of that mode, and must take any risks of delay or miscarriage 
attaching to the acceptor's action in conformity with the request or authority. 

A letter of acceptance misdirected by the acceptor's fault cannot be 
deemed to have been effectually put in a course of transmission to the 
proposer (6) ; this case was properly distinguished by the Allahabad High 
Court from that of an insufficient address furnished by the proposer him- 
self (p). There the proposer's own want of care obviously cannot extenuate, 
but will if possible aggravate, the risk imposed on him by the general rule 
of law. 

Whether a particular letter or writing has been posted, delivered, or 
actually received by the addressee, is a question of fact having no more to 
do with the law of contract than any other matter of fact which it may be 
needful to prove in order to establish or contradict the formation of any 
kind of contract (q). 

It is not thought useful for Indian purposes to enter upon the history 
of the English doctrine, or to discuss the earlier cases, whose results, so far 
as'not overruled, are embodied in later decisions (r). 

Revocation arriving before Acceptance. One point remains unsettled 
in England. It has never been decided whether, a letter of acceptance 
having been despatched by post, a telegram revoking the acceptance and 

(0 It is literally possible to read the Grant (1879) 4 Ex. D. 216, Finch, Sel. 

words of s. 4 of the Act, par. 3, as giving Ca. 133. 

only one chance of sending a revocation, so () Hentliorn v. Fraser. 

that if a man first sends a written accept- (o) Ram Das v. Official Liquidator 

ance by a slow ship, then sends a written Cotton Ginning Co., Ltd. (1887) 9 All. 

revocation by a faster ship, and then 366, 385. 

returns to his first mind and confirms the (j>) Townsend's Case (1871) L. R. 13 

acceptance by a telegram arriving before Eq. 148. Several dicta in this case are 

either letter, the revocation is operative, founded on authority since overruled ; the 

and the confirmation cancelling it is not. decision is good law, though it would now 

But this cannot be seriously entertained, be put on shorter grounds. 

and seems sufficiently excluded by the (,/) Cf. Evidence Act, ss. 16 and 114. 

terms of s. 5. (r) See Appendix to Pollock, Principles 

(t) Henthorn v. Fraser, note (k) above ; of Contract, 7th ed. p. 680. 
Household Fire, etc., Insurance Co. v. 



REVOCATION OF PROPOSALS. 33 

arriving before the letter is operative or not. A negative answer seems to Ss. 4, 5. 

be required by the reasoning of the English decisions (s). If it can be 

said that every acceptance in writing is subject to an implied condition 

that it may be cancelled by a revocation arriving sooner or at the same time, 

it might as easily be held that every proposal expecting an answer by letter 

includes a condition that the answer shall actually be received in due course. 

But this suggestion has been definitely rejected. 

In British India, however, such a revocation is made valid by the 
express terms of ss. 4 and 5 of the Act (t). 

5. A proposal may be revoked at any time before the 
Revocation of communication of its acceptance is complete 

proposals and . 

acceptances. as against the proposer, but not atterwards. 

An acceptanjce may be revoked at any time before the 
communication of the acceptance is^cpm^lejte as against the 
acceptor, but not afterwards. 

Illustration. 

A. proposes, by a letter sent by post, to sell his house to B. 

B. accepts the proposal by a letter sent by post. 

A. may revoke his proposal at any time before or at the moment when 
B. posts his letter of acceptance, but not afterwards. 

B. may revoke his acceptance at any time before or at the moment 
when the letter communicating it reaches A., but not afterwards. 



Revocation of Offers. It is implied in this section that the proposer 
of a contract cannot bind himself (unless by a distinct contract made for a 
distinct consideration) to keep his offer open for any definite time, and 
that any words of promise to that effect can operate only for the benefit 
of the proposer and as a warning that an acceptance after the specified 
time will be too late (s. 6, sub-s. 2). Such is undoubtedly the rule of the 
Common Law. The reason is that an undertaking to keep the offer open 
for a certain time is a promise without consideration ; and such a promise 
is unenforceable. A. gives an undertaking to B. to guarantee, for twelve 
months, the due payment of M.'s bills, which may be discounted by B. at 
A.'s request. This is not a binding promise, but a standing proposal 

(si) See especially the judgment of Scottish decision which is apparently still 

Thesiger, L.J., in Household Fire Imur- followed in Scotland : Countess of Dun- 

ame Co. v. Grant, i Ex. Div. at p. 222, more v. Alexander (1830) Finch, Sei. Ca. 

Finch, Sel. Ca. at p. 137. 120. This is under a different system of 

(t) The Indian rule agrees with a law. 

i.e. 3 



THE INDIAN CONTRACT ACT. 

S. 5. which becomes a promise or series of promises as and when B. discounts 
bills on the faith of it. A. may revoke it at any time, subject to his 
obligations as to any bills already discounted. " The promise " or rather 
offer "to repay for twelve months creates no additional liability on the 
guarantor, but, on the contrary, fixes a limit in time beyond which his 
liability cannot extend " (u). Z. offers to take A.'s house on certain 
terms, an answer to be given within six weeks. A. within that time 
writes Z. a letter purporting to accept, but in fact containing a material 
variation of the terms (see s. 7, sub-s. 1, below) ; Z. then withdraws his 
offer ; A. writes again, still within the six weeks, correcting the error in his 
first letter and accepting the terms originally proposed by Z. No contract 
is formed between Z. and A., since A.'s first acceptance was insufficient, 
and the proposal was no longer open at the date of the second (x). On the 
same principle it was held by the High Court of Madras that a proposal 
to sell goods allowing eight days' time for acceptance may be revoked 
within the eight days unless the promise to keep the offer open was supported 
by consideration (y). 

Sale by Auction, etc. The liberty of revoking an offer before accept- 
ance is well shown in the case of a sale by auction. Here the owner of 
each lot put up for sale makes the auctioneer his agent to invite offers for 
it, and " every bidding is nothing more than an offer on one side, which is 
not binding on either side till it is assented to." Hence a bidder may 
withdraw his bid at any moment before the fall of the hammer (2). It is 
common to insert in conditions of sale a proviso that biddings shall not be 
retracted, but it seems that such a condition is inoperative in law (a), for 
a one-sided declaration cannot alter the bidder's rights under the general 
law, nor is there any consideration for his assenting to it, even if he could 
be supposed to assent by attending the sale with notice of the conditions. 

The English rule that a bid may be withdrawn at any time before the 

(M) Offord v. Danes (1862) 12 C. B. supposed that on the acceptance of a 

N. S. 748, Finch, Sel. Ca. 87. The much- proposal it is necessary for the proposer to 

discussed earlier case of Cooke v. Oxley make some fresh declaration of consent, 

(1790) 3 T. R. 653, Finch, 85, is now which is contrary both to principle and 

received authority only so far as it to all recent authority, 
decides this. See Stevenson v. McLean, (x) Rovtledge v. Grant (1828) 4 Bing. 

(1880) 5 Q. B. D. 346, 351 ; and Head v. 653, 29 R. R. 672. 

Diggoti (1828) 3 M. & R. 97 (in which the (y) Schonlank v.. Muthunagana Chctti 

parties were face to face, and it is not (1892) 2 Mad. L. J. 57. 
clear whether the defendant did or did (z) Payne v. Care (1789) 3 T. R. 148, 

not signify his "revocation before the 1 R. R. 679. 

plaintiff signified his acceptance) cannot (a) Such was Lord St. Leonards' 

be taken as going farther. The reason opinion : Dart, V. & P. 6th ed. i. 139. 
there given is clearly wrong, for it is 



STANDING OFFERS. 35 

fall of the hammer is followed in British India (ft). When the bid of an S. 5. 
agent at an auction sale was accepted by the auctioneers Icutclia-pucca 
(subject to sanction of the owner of the goods), and the agent agreed 
thereto, it was held that this did not preclude the principals of the agent 
from exercising their right of retracting the bid before it was accepted by 
the auctioneers (c). In this case an attempt was unsuccessfully made to 
prove a usage of trade according to which, if a bid were accepted kutcha- 
pucca, the bidder could not retract it until it had been finally accepted or 
refused. If such a usage were established, it would have been, no doubt, 
inconsistent with the terms of the present section. But, so far as the 
express enactments of the Act are concerned, such a usage is saved by the 
last clause of s. 1. It would remain to be seen whether it would not be 
disallowed as contrary to the general principles of the law. 

Standing Offers. A writing whereby A. agrees to supply coal to B. at 
certain prices and up to a stated quantity, or in any quantity which may 
be required, for a period of twelve months, is not a contract unless B. 
binds himself to take some certain quantity, but a mere continuing offer 
which may be accepted by B. from time to time by ordering goods upon 
the terms of the offer. In such a case, each order given by B. is an 
acceptance of the offer ; and A. can withdraw the offer, or, to use the 
phraseology of the Act, revoke the proposal, at any time before its accept- 
ance by an order from B. (d). Such a transaction may be reduced to a 
statement by the intending vendor in this form: "If you will send me 
orders for coal, I shall supply it to you for a period of twelve months at a 
particular rate." This is merely a proposal from A. to B. If, in reply to 
such a proposal, B. says to A., " I agree," it does not constitute an accept- 
ance of the proposal. An acceptance can take place only by B. sending an 
order to A. If, however, there is an undertaking on the part of B. not to 
send orders for coal (or whatever the goods in question may be) to any 
other person than A. during a specified time, there is a good consideration 
for a promise by A. to supply such coal as B. may order on the specified 
terms and up to the specified extent. The same principle has been 
affirmed by the Judicial Committee on an appeal from the Province of 
Quebec, where French-Canadian law, now codified, is in force. A printer 
covenanted to execute for the Government of the Province, during a term 
of eight years, the printing and binding of certain public documents on 
certain terms expressed in a schedule. In the course of the same year the 

(&) Agra Jianlt v. Hamlin (1890) 14 Wadia $ Co. (1899) 24 Bom. 97, following 

Mad. 235. G. N. II. Co. v. William (1873) L. R. 9 

(0 Macltenz'tev. 6Vti/w (1889) 16Cal. C. P. 16, Finch, Sel. Ca. 370; Kundan 

702. Lai v. Secretary of State for India (1904) 

(d) The Bcmjal Coal Co. v. Homee, 1'unj. Eec. lio. 72. 

32 



36 THK INDIAN CONTRACT ACT. 

Ss. 5, 6. Lieuteuant-Governor cancelled the agreement. The printer sued the 
Crown by petition of right, and it was ultimately held, reversing the 
judgment below, that he had no ground of action. 

" The contract . . . does not purport to contain any covenant or 
obligation of any sort on the part of the Crown. The respondent under- 
takes to print certain public documents at certain specified rates. For 
all work given to him on the footing of the contract the Government was 
undoubtedly bound to pay according to the agreed tariff. But the contract 
imposes no obligation on the Crown to pay the respondent for work not 
given to him for execution. There is nothing in the contract binding the 
Government to give to the respondent all or any of the printing work 
referred to in the contract, nor is there anything in it to prevent the 
Government from giving the whole of the work, or such part as they think 
fit, to any other printer " (e). 

In another similar case in England, where a town council had 
accepted a tender for the supply of certain goods for twelve months, a 
Divisional Court held that a contract was formed by the acceptance of the 
tender (/). One of the Judges thought there was an implied obligation on 
the council's part not to order goods of that kind elsewhere during the 
term. The case before the Judicial Committee which we have just 
mentioned was not cited. Unless some sufficient distinction can be 
discovered in the facts (which the present writer has failed to do), it is 
submitted that this judgment is contrary to both principle and authority, 
and ought not to be followed. 

Advertisements of rewards and other so-called " general offers " have 
also raised questions whether particular acts were proposals of a contract 
capable of being promises by acceptance, or merely the invitation of 
proposals. This will be more conveniently dealt with under s. 8. 

6. A proposal is revoked 

Revocation (1) ^J *ke communication of notice of 

how made. revocation by the proposer to the 

other party ; 

(2) by the lapse of the time prescribed in such proposal 
for its acceptance, or, if no time is so prescribed, 

(e) R. v. Demurs [1900] A. C. 103. 108. in a curious manner, the question being 

English authorities on the point (which whether the tradesman had an interest in 

in the Province of Quebec could have a contract with the council (apart from 

only a " persuasive" authority) were not any goods being actually ordered) which 

referred to. disqualified him for election as a town 

(/) Gloucester Municipal Election Petl- councillor. 
tion [1901] 1 K. B. 683. The point arose 



NOTICE OF REVOCATION. 37 

by the lapse of a reasonable time, without com- S. 6. 
munication of the acceptance ; 

(3) by the failure of the acceptor to fulfil a condition 

precedent to acceptance ; or 

(4) by the death or insanity of the proposer, if the fact 

of his death or insanity comes to the knowledge 
of the acceptor before acceptance. 

Notice of Revocation. Here sub-s. 1 appears to make ifc a condition of 
revocation being effectual that ifc shall be communicated by the proposer or 
(which is the same thing) by his authority. This was probably intended 
to correspond with the law of England, but a few years after the Act was 
passed the Lords Justices James and Hellish in Dickinson v. Dodds (g) used 
language apparently involving a different rule, though that case actually 
decided only that if an owner of immovable property makes a proposal to 
sell it to one man, and before that proposal is answered agrees to sell it to 
another, and the first, with the knowledge of this fact, then formally 
tenders an acceptance, the purchaser who first actually accepts has the 
better right to specific performance. It was not decided, though the 
Judges seem to have thought, that knowledge, not communicated by the 
proposer, that the property was sold to some one else, was such a revocation 
of the first proposal as in itself made acceptance by the person to whom it 
was made impossible. Acceptance of a proposal which the proposer has 
made it impossible to fulfil is not necessarily unmeaning or inoperative ; 
the fact that an obligation cannot be specifically performed is consistent 
with the promisor being bound to pay damages for his default. Many 
obligations are from the first incapable of specific performance so far as 
any power of the Court is concerned. It would be absurd to hold that a 
promisor is to go scot-free because by his own action he has reduced the 
possibilities of his obligation from a higher to a lower level. The reasons 
given for the decision in Dickinson v. Dodds have been freely criticised in 
England; but, as the decision itself is not of positive authority in British 
India in a matter covered by the terms of the Contract Act, ifc does not 
seem useful to pursue the discussion here. The true principle of such 
cases is stated by Professor Langdell (Ji) : " An offer to sell property will not 
be revoked by a sale of the property to some one else. As evidence of a 
change of mind on the part of the offerer, such an act cannot be put higher 
than a letter of revocation sent to the offeree by mail ; and yet it is well 

(</) (187(>) 2 Ch. Div. 463. (//,) Summary of the Law of Contracts, 

Boston (Mass.), 1880, s. 181. 



38 THE INDIAN CONTRACT ACT. 

S. 6. settled that a letter of revocation will not be operative until it is received 
by the offeree (?'). Nor will the subsequent sale of the property to some one 
else constitute any legal obstacle to the continuance of the offer. The 
original offeree and the subsequent purchaser cannot, indeed, both acquire 
the property, but they can both acquire a right to it as against the seller, 
together with the alternative right to damages ; and this is all that a 
contract secures to one in any case." It has, indeed, been suggested by 
writers entitled to respect (Jc) that an act of the proposer inconsistent with 
his original intention will be operative, if it comes in any way to the know- 
ledge of the offeree, as an act which, under s. 3, "has the effect of 
communicating" a revocation of the proposal. If this were so, Dickinson v. 
Dodds would be good law in British India to the full extent of the reasons 
there given. But, with all submission, the act of selling to one man property 
already offered to another cannot be itself an act which has the effect of 
communicating notice to that other. Such notice must be the effect of some 
other act or event. As in Dickinson v. Dodds, a stranger may inform the 
original offeree that the new transaction, or some such transaction, has 
taken place. This is no act of the party supposed to be revoking, and 
therefore its effect, if any, cannot depend on the words of s. 3. It is 
perhaps needless to consider what would be the result if the first offeree in 
person were to overhear a conversation between the vendor and the new 
purchaser constituting an agreement inconsistent with the first offer. We 
have already expressed a doubt whether the true meaning of s. 3 was to 
ascribe the effect of communicating proposal, revocation, or acceptance, to 
acts done without any such intent. On the whole, we are unable to follow 
the learned commentators to whose interpretation we have referred. 

Revocation not presumed. As Lord Justice James said, "prima 
facie every contract is permanent and irrevocable, and it lies upon a person 
who says that it is revocable or determinable to show either some expression 
in the contract itself, or something in the nature of the contract, from which 
it is reasonably to be implied that it was not intended to be permanent and 
perpetual, but was to be in some way or other subject to determination " (/). 

(I) A cheque is not effectually counter- 949. Accordingly, where a contract was 

manded by a telegram delivered at the made between the widow of a Gayawal 

bank on which it is drawn but not in fact priest and the defendant whereby the 

brought to the banker's notice : Curtice widow adopted the defendant, a married 

v. London City $ Midland Bank [1908] man, as her son in order that the defen- 

1 K. B. 293, C. A. dant may get his feet worshipped by the 

(k) Cunningham and Shephard's Indian clientele of her deceased husband and 

Contract Act, 9th ed. p. 25. receive emoluments from them for the 

(1) Llanelly Ry. and Dock Co. v. benefit of himself and the widow, and the 

L. 4- N. W. E. Co. (1873) L. R. 8 Ch. 942, contract itself specified the circumstances 



REVOCATION NOT PRESUMED. 39 

This dictum, and the Indian case cited in our note, really belong to the S. 6. 
subject of interpretation, in cases where it is alleged that an option to deter- 
mine a completed contract is conferred by the terms of the contract itself. 
But the principle that an intent to revoke what has once been deliberately 
uttered will not be lightly presumed or too readily inferred appears to be 
equally applicable to proposals. Moreover, the Act does not explicitly deal 
with interpretation anywhere. The Lord Justice went on to point out that 
many contracts, those of employment, agency, and the like, are by their 
nature not expected to be of indefinite duration. The agreement before 
him was an agreement for running powers between two railway companies. 

Lapse of time for Acceptance. The rule laid down by sub-s. 2 is now 
elementary. We have already had to cite some of the authorities which 
recognise it. On the point of an acceptance after the expiration of a 
reasonable time being too late, there is one direct English authority, where 
it was held that a person who applied for shares in a company in June was 
not bound by an allotment made in November (m). In a recent English 
company case an underwriting letter contained the words "This engagement 
is binding on me for two months" ; they were incapable of operating as a 
promise, and it was held, with some doubt, that their real effect was an offer 
with a limit of two months for acceptance (ri). 

Condition precedent to Acceptance. As to sub-s. 3, it is not very 
easy to see what a condition precedent to acceptance means. The words 
(like several other of the less felicitous phrases in the Act) appear to have 
been borrowed without much reflection from the draft Civil Code of the 
State of New York, completed in 1865 and never adopted in its own State. 
There is nothing in the original context to throw light on them. A man 
proposing a contract may request either a single act, or several acts, or a 
promise or set of promises, or both acts and promises, as the consideration 
for a promise which he offers. The other party may do something obviously 
inconsistent with performing some or one of the things requested. This 
amounts to a tacit refusal, and accordingly the proposal is at an end 
(see p. 34, above), and the parties can form a contract only by starting 

under which it might be cancelled, it was may be terminated, and it is impossible 

held that, though the adoption was invalid, to hold that the parties intended that the 

the contract was not determinable at the contract should be terminable merely at 

mere choice of the widow so as to affect the option of one of the parties": 

the rights created thereby in favour of the Lachmi Dal Mohutain v. Kissen Lall 

defendant. The Court said: "We are (1906) 11 C. W. N. 147, citing James, 

unable to accept the suggestion that the L.J., as above. 

contract in this case was a contract of (/) llamsgate Victoria Hotel Co. v 

service, terminable upon reasonable 3fontejiore (186fi) L. R. 1 Ex. 109. 

notice. The contract itself indicates () Illndley's Case [189fi] 2 Ch. 121, 

some of the circumstances under which it C. A. 



40 THE INDIAN CONTRACT ACT. 

Ss. 6, 7. afresh. If the fact amounts to a refusal, there is no manifest reason for 
calling it failure to fulfil a condition precedent. The term is not used in 
this connection in English books. Everything required on the acceptor's 
part to complete an acceptance would rather seem to be part of the accept- 
ance itself. This sub-section does not appear to have been judicially 
interpreted, or indeed to have any very material effect. 

Death or insanity of proposer. The provision made by sub-s. 4 is 
quite clear. It is a variation from English law, where on the one hand it is 
understood that " the death of either party before acceptance causes an offer 
to lapse," without any qualification as to notice, and on the other hand it 
does not seem that supervening insanity of the proposer operates as a revo- 
cation at all, since the contract of a lunatic is only voidable and not void. 
If an offer is addressed to a man who dies without having accepted or 
refused it, his executors have no power to accept it either in England or in 
British India. For the proposer cannot be presumed to have intended to 
contract with a deceased person's estate. This is very different from the case 
of one who accepts a proposal without knowing that the proposer is dead. 

7. In order to convert a proposal into a promise, the 
Acceptance must acceptance must 

(1) be absolute and unqualified ; 
(2) be expressed in some usual and reasonable manner, 
unless the proposal prescribes the manner in 
which it is to be accepted. If the proposal pre- 
scribes a manner in which it is to be accepted, and 
the acceptance is not made in such manner, the 
proposer may, within a reasonable time after the 
acceptance is communicated to him, insist that 
his proposal shall be accepted in the prescribed 
manner, and not otherwise ; but if he fails to do 
so, he accepts the acceptance. 

Certainty of Acceptance. The rule of the first sub-section is in itself 
obviously necessary, for words of acceptance which do not correspond to 
the proposal actually made are not really an acceptance of anything, and, 
therefore, can amount to nothing more than a new proposal, or, as it is 
frequently called, a counter-offer. The difficulties which occur under this 
head are difficulties not of principle but of construction, the question being 
in every case whether a particular communication is to be understood as a 
real and absolute acceptance, or as introducing a condition or qualification 



CERTAINTY OF ACCEPTANCE. 41 

which makes it only a stage in a course of negotiation capable of leading, S. 7. 
but not necessarily leading, to a concluded contract. Sometimes additional 
words that seem at first sight to make the acceptance conditional are no 
more than the expression of what the law implies, as where in England an 
offer to sell land is accepted " subject to the title being approved by our 
solicitors." The reasonable meaning of this appears to be not to make a 
certain or uncertain solicitor's opinion (which might be arbitrary) final, but 
only to claim the purchaser's common right of investigating the title with 
professional assistance and refusing to complete if the title proves bad (0). 
On the other hand, reference to special conditions not known to the other 
party ( p), as distinguished from terms already made part of the proposal (#), 
will prevent an acceptance from being final. So will a reference to future 
unspecified terms " to be arranged," or the like, between the parties or their 
agents (;). But an acceptance on condition, coupled with an admission 
that the condition has been satisfied, is in effect unconditional. Thus a 
policy of insurance expressed to be subject to the payment of premium, but 
reciting that the premium has been paid, is a complete and binding contract, 
and the insurers cannot avoid it by showing that the payment has in fact 
not been made (s). 

Although there can be no contract without a complete acceptance of 
the proposal, it is not universally true that complete acceptance of the 
proposal makes a binding contract ; for one may agree to all the terms of 
a proposal, and yet decline to be bound until a formal agreement is signed (/), 
or some other act is done. This is really a case of acceptance with an 
added condition, but of such special importance as to call for separate 
mention. There may be an express reservation in such words as these : 
" This agreement is made subject to the preparation and execution of 
a formal contract " (). ' Or a proposal for insurance may be accepted in all 
its terms, but with the statement that there shall be no assurance till the 
first premium is paid. Here again there is no contract, but only a counter- 
offer, and the intending insurer may refuse a tender of the premium if 

00 Ilustey v Home-Pay ne (1879) 4 Q.B.I 11,0. A. 

App. Ca. 311, 822, per Lord Cairns. The (t) " If to a proposal or offer an assent 

decision of the C. A., who had taken a be given subject to a provision as to a 

different view on this point, was affirmed contract, then the stipulation as to the 

on other grounds. contract is a term of the assent, and there 

O) Jones v. Daniel [1894] 2 Ch. 332. is no agreement independent of that 

(</) Filly v. fluunxeU [1896] 2 Ch. 737. stipulation " : Ckinnoclt v. Marchioness of 

(r) Iloneyman v. Marryatt (1857) 6 Ely (1865) 4 D. J. S. 638, 646. 

H. L. C. 112; Stanley v. Dowdeswell (u) Winn v. Bull (1877) 7 Ch. D. 29, 

(1874) L. R. 10 C. P. 102. Finch, Scl. Ca. 81. 

00 Roberts v. Security Co. [1897] 1 



42 THE INDIAN CONTRACT ACT. 

S. 7. there has meanwhile been any material change in the facts constituting the 
risk to be insured against (.r). Where there is no precise clause of reserva- 
tion, but the acceptance is not obviously unqualified, it becomes a question 
of construction whether the parties intended that the terms agreed on 
should merely be put into form, or whether they should be subject to a new 
agreement the terms of which are not expressed in detail (y), and this must 
be determined by examination of the whole of a continuous correspondence 
or negotiation. It will not do to pick out this or that portion which, if 
it stood alone, might be sufficient evidence of a contract (z). 

In British India it has been laid down, in accordance with English law 
as well as with the terms of the Act, that an acceptance with a variation is 
no acceptance ; it is simply a counter-proposal, which must be accepted 
by the original promisor before a contract is made (a). Thus where an 
offer was made for the purchase of certain goods which were to be ordered 
out from Europe, and the offer was accepted " free Bombay Harbour and 
interest," being a term not contained in the offer, it was held that there 
was no acceptance within the meaning of this section. Where a buyer 
signed a bought note after inserting therein in Chinese certain terms which 
were not in the sold note previously signed by the seller, it was held that 
there was no contract unless the seller accepted the additional terms in 
Chinese (b). In such a case the acceptance with a qualification is in its 
nature a counter-proposal which, if accepted by the proposer, would con- 
stitute an agreement. The English authorities have also been followed on 
the point that parties are free to provide that the agreement shall not be 
complete and operative until its terms are reduced into writing, or are 
embodied in a formal document, and that it is a question of interpretation 
whether they have done so or not. Where, however, there is no such 
stipulation express or implied, the mere circumstance that the parties desire 
to put the agreement into writing or in a formal instrument will not 
prevent the agreement from being enforced, assuming, of course, that an 



(#) Canning v. Farquhar (1886) 16 even if there was a complete contract, 

Q. B. Div. 727 ; see especially per the purchaser was entitled to rescind. 
Lindley, L.J., at p. 733. (ti) Per Cur., Jfttj/ Mahomed v. Spinner 

(y) Jessel, M.R., in Whin v. Jiitll, (1900) 24 Bom. 510, 523. Here the 

note, (it) above. plaintiffs maintained that the additional 

(z) Hussey v. Horne-Payne (1879) 4 term was already implied in the offer by 

App. Cas. 311 ; Aryodaya S. % W. Co. v. a previous course of dealing or otherwise. 

Javalpramd (1903) 5 Bom. L. II. 909. The defendant maintained that there was 

Cp. the comments of North, J., in a contract without that term. The Court 

Bellamy v. Debenhani, 45 Ch. D. 481 ; no held that there was no contract at all. 
decision on this question in the C. A. (i) All Skain Sholte v. Moot/tin Chetty 

[1891] 1 Ch. 412, where it was held that, (1899) 4 C. VV. N. 453. 



CERTAINTY OF ACCEPTANCE. 43 

agreement otherwise complete and enforceable is proved (c). The circum- S. 7. 
stance that the parties do intend a subsequent agreement to be made is 
evidence to show that they did not intend the previous negotiations to amount 
to an agreement, though not conclusive ; they will be bound by a previous 
agreement "if it is clear that such an agreement has been made " (d). 
Where, however, the formalities are not of the parties' selection, so that 
nothing turns upon the intention of the parties, no inference against a 
concluded agreement can be drawn from the non-completion of these 
formalities. Thus while a suit was "pending the parties entered into a 
written agreement whereby the plaintiff agreed to accept the property of 
the defendant in adjustment of the suit. The agreement was not recorded 
as required under s. 98 of the Code of Civil Procedure then in force, being 
Act VIII of 1859. It was not, therefore, such a final adjustment of the 
suit as precluded the suit from being proceeded with. The plaintiff, taking 
advantage of that fact, proceeded with the suit, and obtained a decree 
against the defendant. The defendant subsequently brought a suit against 
the plaintiff for damages for breach of the agreement ; and it was held that 
he was entitled to damages, there having been a binding agreement 
between the parties, though the formality of recording the agreement was 
not completed (e). Such cases, however, must be distinguished from those 
where the negotiations have not led to a concluded agreement. Thus 
in Koylash Chunder v. Tariney Churn (/) the defendant wrote to the 
plaintiff : " The value of your house has been fixed through the broker at 
Rs. 13,125. Agreeing to that value, I write this letter. Please come 
over to the office of my attorney between three and four this day with the 
title deeds of the house and receive the earnest.'' In reply the plaintiff 
wrote : " You having agreed to purchase our house for Us. 13,125, have 
sent a letter through the broker, and we are agreeable to it, and we will be 
present between three and four this day at your attorney's, and receive the 
earnest." The plaintiff and the defendant met at the attorney's office, but 
the attorney was absent, and accordingly no inspection of title deeds or 
payment of the earnest money took place. The plaintiff sued the defendant 
for specific performance, but it was held that there was no binding contract, 
as two important matters namely, inspection of the deeds (g} and the 

00 Wliympcr v. JBuckle (1879) 3 All. nasawmy (1874) 8 M. H. C. 1. 

469, citing Brogden. v. Metropolitan Rail- (/) (1884) 10 Cal. 588. 

n-iiij Co. (1887) 2 App. Ca. 666 ; Lewis v. (#) It looks as if there had been some 

Jinias (1877) L. R. 3 Q. B. D. 667 ; Bonne- misapprehension here. In English prac- 

well v. Jenkins (1878) L. K. 8 Ch. D. 70. tice, at any rate, a contract for purchase 

(d) Ridgivay v. Wharton (1856-7) 6 of land is not suspended until the title 

H. L. C. 238, 264. has been shown ; there is a complete con- 

(e~) Thota Veiihatachellasaml v. Kristt- tract as soon as all the terms including 



THE INDIAN CONTRACT ACT. 

S. 7. amount and payment of the earnest money were left to be arranged at 
the attorney's office. Garth, C. J., said : " As regards the earnest money, 
it must be observed that both parties treat that as an element in the 
bargain. . . . Suppose the meeting had taken place, and the parties had 
been unable to agree as to the amount of the earnest money, how could it 
possibly have been said that they had arrived at any binding agreement ? " (h). 
A provision in an agreement for the sale of a house that " on approval of 
the title by the purchaser's solicitor the purchase money should be paid" 
has not the effect of rendering the completeness of the agreement con- 
ditional upon the approval of the title by the solicitor, but of simply fixing 
the time for the payment of the purchase money without waiting for a 
conveyance (i). 

Apparent without real Acceptance. In exceptional circumstances 
there may be an unconditional acceptance in terms of a proposal which in 
fact the parties do not understand in the same sense, and which neither party 
is estopped from understanding in his own sense. Here the acceptance is 
merely apparent, and no contract is formed. Such cases are better postponed 
till we come to s. 13, which see. 

Manner of Acceptance (sub-s. 2). A proposal must be accepted 
according to its terms. Therefore, if the proposer chooses to require that 
goods shall be delivered at a particular place, he is not bound to accept 
delivery tendered at any other place (&). It is not for the acceptor to say 

special conditions, if any, as to title sole and absolute judge as to whether or 

have been agreed upon, subject to the not there was a good title, provided he 

purchaser's fight to rescind, or to com- acted reasonably and land fide. This case 

pensation, if a title is not shown accord- seems, however, of doubtful authority, as 

ing to the contract, and often, by agree- Wilson, J., did not feel free to follow the 

ment, to the vendor's right to rescind if opinion expressed by Lord Cairns in 

he cannot remove any objection. Hussey v. Horne-Payne in the House of 

(/<) It looks very much as if some well- Lords (see p. 41, above), which would 

known customary proportion of earnest presumably be upheld by the Judicial 

money was really intended by the parties, Committee. It would be a misfortune to 

but apparently there was no proof of this. Indian jurisprudence if English decisions 

In Sreegopal v. Ramclnirn (1882) 8 Cal. made with regard to the very peculiar 

856, a document purporting to be an English conditions of land title and 

agreement relating to the sale of a house transfer were to be followed literally 

was made " subject to the approval of the and indiscriminately by the Indian 

purchaser's solicitor," and it was held, Courts. 

citing Hudson v. Suck, 1 Ch. D. 683, and (/) Co/ten v. Sutherland (1890) 17 Cal. 

Hnssey \.Horne-Payne (in C. A.), 8 Ch. 919. 

D. 670, that there was no complete con- (Tt) Eliason v. Ilensliaw (1819) Sup. 

tract between the parties until the title Ct. U. S., 4 Wheaton,225, Finch, Sel. Ca. 

was approved by the purchaser's solicitor, ">0. 
who was for that purpose constituted the 



MANNER OF ACCEPTANCE. 45 

that some other mode of acceptance which is not according to the terms of Ss. 7, 8. 
the proposal will do as well. 

The present sub-section, however, throws on the proposer the burden of 
notifying to the acceptor that an acceptance not in the prescribed manner 
and form is insufficient, and he remains bound if he fails to insist on an 
acceptance such as he required. No previous or subsequent authority for 
this has been found in the common la\v, nor does analogy seem to favour it. 

At all events, one party to a negotiation cannot impose on the other 
the burden of expressly refusing either an original offer or a counter-offer 
bysaying that he will assume acceptance unless he hears to the contrary (/). 
Assent to his terms is a positive act within the other party's discretion, 
and he has no right to presume it. Neglect to answer a business offer is 
certainly not, as a rule, prudent or laudable ; still there is no legal duty to 
answer at all. 

8. Performance of the conditions of a proposal, or the 
Acceptance by acceptance of any consideration for a reciprocal 
tS^roSrins P r o m ise which may be offered with a proposal, 
is an. acceptance of the proposal. 

General Offers. The terms of this section are very wide. Nothing 
like them occurs in the original draft of the Indian Law Commissioners, 
nor, so far as known to us, in any authoritative statement of English law. 
They appear to have been taken from the draft Civil Code of New York, 
with slight verbal alteration. In the absence of illustrations, their intended 
scope is not very clear. It seems, however, fairly certain that the division 
of the subject-matter of the section into two branches, " performance of 
the conditions of a proposal " and " acceptance of any consideration for a 
reciprocal promise which may be offered with a proposal," corresponds to 
the general division of proposals into those which offer a promise in 
exchange for an act or acts and those which offer a promise in exchange 
for a promise. We have already noted on s. 2 (a) and (b) (p. 12, 
above) that the word proposal, as defined by the Act, seems to be limited 
to the offer of a promise. Accordingly " performance of the conditions of 
a proposal" seems to be nothing else than doing the act requested by the 
proposer as the consideration for the promise offered by him, as when a 
tradesman sends goods on receiving an order from a customer. The only 
previous definition of acceptance in the Act is that a proposal is said to be 
accepted when the person to whom it is made "signifies his assent thereto" 
(s. 2 (b)). This has to be read with the provisions as to communication 

(1) Felt house v. lilndlc-ij (1862) 11 llajl Mahomed, v. Sj>l niter (1900) 24 Bom. 
C. B. N. S. 869, Finch, Sel. Cu. 51. Cp. 510, 524. 



THE INDIAN CONTRACT ACT. 

S. 8. in 8S. 4 and 7. So fur there might have been donbt whether acceptance 
can ever be binding without communication ; and, indeed, the present 
section does not expressly dispense with communication in any case. 
Nevertheless it appears, in its first branch, to recognise the fact that in the 
cases in which the offerer invites acceptance by the doing of an act " it is 
sometimes impossible for the offeree to express his acceptance otherwise 
than by performance of his part of the contract " (m). The most obvious 
example is where a reward is publicly offered to any person, or to the first 
person, who will recover a lost object, procure certain evidence, or the like. 
Here the party claiming the reward has not to prove anything more than 
that he performed the conditions on which the reward was offered, which 
conditions may or may not include communication by him to the proposer. 
In the simple case of a reward proposed for something in which the proposer 
has an obvious interest, there is not likely to be any other question than 
what the terms were, and whether they have been satisfied by the claimant. 
But analogous or seemingly analogous cases may be less simple. There 
may be questions whether the offer was sufficiently certain, or whether it 
was intended, or could reasonably be taken, as the offer of a contract at all. 
In England an open letter of credit authorising the addressee to draw on 
the issuer to a specified extent, and requesting " parties negotiating bills 
under it to endorse particulars," has been held to amount to a general 
invitation or request to advance money on the faith of such bills being 
accepted, and to constitute a contract with any one so advancing money 
while the credit remained open (n). This is undoubted law, but the same 
cannot be said of the judgments which have held (in the circumstances, not 
quite decisively) that when a sale by auction is advertised as without reserve 
the auctioneer makes a general offer to bidders, which becomes a binding 
promise to the highest bond fide bidder, and gives him a right of action 
" as upon a contract that the sale shall be without reserve " (0) ; and that 
a railway company's time-table is a general proposal to run trains according 
to the table, which is accepted by an intending passenger tendering the 
price of a ticket ( p). These last-mentioned cases, at any rate, mark the 

(*) Anson, Law of Contract, c. 1, s. 5, without reserve. Probably courts of first 

p. 29, llth ed. instance in England are bound to follow 

(.) BA- Agra a/id MasttermuiCs Bank, this case. See Johnston v. Boyex [1899] 

Ex jjarte Asiatic Banking Corporation 2 Ch. 73, 77. 

(1867) L. E. 2 Ch. 391, Finch, S. C. 40. O) Dettton v. G. N. E. Co. (1856) 5 

(V) Warlow v. Harrison (185!)) 1 E. & E. & B. 860. Finch, S. C. 21. It was also 

E. 309, Ex. Ch., Finch, S. C. 16. Two held that an action for deceit would lie 

members of the Court preferred to say on the facts. This opinion is not easy to 

that the auctioneer was liable as on a reconcile with later authorities. See 

warranty that he had authority to sell Pollock on Torts, 8th ed. 297. 



GENERAL OFFERS. 47 

extreme limit of effective proposals of a contract as distinguished from the S. 8. 
invitation of proposals by a general statement of the terms on which one 
is minded to do business. It has been held, on the other hand, that when 
particular goods are advertised for sale by auction the auctioneer does not 
contract with any one who attends the sale, intending to purchase those 
goods, that they shall be actually put up for sale (q) ; and that an advertise- 
ment for tenders for goods to be sold is not a proposal capable of being a 
contract to sell to the highest bidder, but " a mere attempt to ascertain 
whether an offer can be obtained within such a margin as the sellers are 
willing to adopt " (r). In some cases the difficulty of ascertaining the 
acceptor, if the announcement is treated as a proposal, is enough to dispose 
of the question. A second-hand bookseller's catalogue is not a series of 
offers, but only invitation of offers ; for if the catalogue had the effect of 
proposing a sale of every book to the first person who paid or undertook 
to pay the marked price, the bookseller would be bound to decide at his 
peril, as between practically simultaneous applicants, whose acceptance was 
first in order of time, and this might involve obscure matters of both fact 
and law. Clearly the bookseller does not mean to tie his hands in this 
way, nor can any reasonable customer suppose that he does. In fact, 
interpretation must be largely guided, in this class of transactions, by 
business usage and common sense. Where the acceptance of a proposal 
consists of the performance of the condition of the proposal, the contract 
is made at the place where the condition is performed (s). 

Acting on Offer when sufficient Acceptance. The nature of the 
acceptance required in these cases was considered by the English Court of 
Appeal in Carlill v. Carbolic Smoke Ball Co. (t). The defendant company, 
being the proprietor of the " carbolic smoke ball," a device for treating the 
nostrils and air passages with a kind of carbolic acid snuff, issued an 
advertisement offering 100 reward to any person who should contract 
influenza (or similar ailments as mentioned) after having used the ball as 
directed. It was also stated that 1,000 was deposited with a named bank, 
"showing our sincerity in the matter." The plaintiff bought one of the 
smoke balls by retail, did use it as directed, and caught influenza while she 
was still using it. Hawkins, J. (), held in a considered judgment that 
she was entitled to recover 100 as on a contract by the company. On 
appeal from this judgment it was held that the defendant company could 

(tf) Harris v. NicUerson (1873) L. K. 8 () [1893] 1 Q. B. 256 ; and (with 

Q. B. 286, Finch, S. C. 10. omissions) Finch, S. C. 25. 

(>) Spencer v. Harding (1870) L. R. 5 (it) The facts were not disputed. See 

C. P. 561. the report in the Court below, [1892] 2 

(s) Sitaram Mar war I v. Thompsim Q. B. 484. 
1905) 32 Gal. 884. 



48 THK INDIAN CONTRACT ACT. 

S. 8. not be heard to say the offer was not meant seriously ; that the terms, 
though rather vague, were capable of a certain meaning, and at least included 
the event, which had happened, of the plaintiff taking influenza while still 
using the remedy ; and that, if the offer was unguarded and improvident, 
that was the defendants' own folly and no answer to the plaintiff's claim. 
There was an offer to any one who performed the condition (namely, of 
using the smoke ball as directed) on the faith of the advertisement ; and by 
such performance it became a contract, not absolute, but subject to the 
further independent condition of the user contracting influenza or the like 
while using the remedy, and perhaps during some reasonable time after- 
wards. (As to conditional or, as the Act calls them, contingent contracts 
in general, see Chap. III., below, ss. 31 sqq.) As to the objection that to 
complete the plaintiff's acceptance of the cffer there must either be com- 
munication to the defendant or some act of a public nature, Bowen, L.J., 
said (x) : " One cannot doubt that, as an ordinary rule of law, an 
acceptance of an offer made ought to be notified to the person who makes 
the offer, in order that the two minds may come together. . . . But there 
is this clear gloss to be made upon that doctrine, that, as notification of 
acceptance is required for the benefit of the person who makes the offer, 
the person who makes the offer may dispense with notice to himself if he 
thinks it desirable to do so, and I suppose that there can be no doubt that 
where a person, in an offer made by him to another person, expressly or 
impliedly intimates a particular mode of acceptance as sufficient to make 
the bargain binding, it is only necessary for the other person to whom such 
offer is made to follow the indicated method of acceptance ; and if the 
person making the offer expressly or impliedly intimates in his offer that it 
will be sufficient to act on the proposal without communicating acceptance 
of it to himself, performance of the condition is a sufficient acceptance 
without notification." 

It was said without hesitation, several years earlier, by a very learned 
American writer, that " in a unilateral contract " i.e., where a performance 
is given for a promise " an acceptance in terms may be, and commonly is, 
dispensed with " (y). Earlier still the question had been judicially thrown 
out: " If a man writes, 'Send me such and such goods, and I will pay for 
them,' is not the sending of the goods, without more, an acceptance of the 
offer ? " (z). Perhaps ic would now be a safe and more elegant way 
of stating the law to say that a proposal is in every case accepted by 

(x) [1893] 1 Q. B. at p. 269. (-) Cresswell, J , in liar ivy v. Johnston 

(y) Langdell, Summary of the Law of (1848) 6 C. B. 295, 304, 77 R. R. 328, 332. 

Contracts, s. 12 ; cp. Harriman on Con- The suggestion appears to have escaped 

tract, 48, 2nd ed. the notice of text-writers for many years. 



ACTING ON OFFER. 49 

performance of its conditions (or perhaps, more accurately, by compliance S. 8. 
with its terms) ; that communication by the acceptor to the proposer or 
his authorised agent is necessary when the terms consist of or include a 
counter-promise (for there is no promise at all without communication)^) ; 
but that when only acts are required the communication of their perform- 
ance may or may not be added as a term of the offer at the will of the proposer, 
which may be either express or inferred from the nature and circumstances 
of the proposal. From this point of view, the present section of the Act 
would be logically prior to s. 7. 

The second branch of the section as to " acceptance of any considera- 
tion," jBtc., is rather obscure. It is hard to say with any certainty to what 
particular class or classes of transactions it relates ; nor has anything 
occurred, so far as is known, to throw light upon it in the generation 
which has elapsed since the Act was passed. The words seem more appro- 
priate to gifts or transfers of property than to contracts. It is generally 
sound principle, no doubt, that what is offered on conditions must be taken 
as it is offered. The use of the word " reciprocal " is curious, for it seems 
to exclude the most obvious class of cases, as where goods are sent on 
approval, and the receiver keeps them with the intention of buying them. 
Here the seller need not and commonly does not offer any promise, and 
there is therefore no question of a reciprocal promise as defined in the Act 
(s. 2 (f )). No doubt the acceptance of an offered consideration, as such 
amounts to giving the promise (whether reciprocal or not) for which it was 
offered, or else raises an equivalent obligation. But a thing which is 
offered in one right and for one purpose may be taken under a different 
claim of right and with a different intent ; and in that case (which is 
exceptional but of some importance) the legal result will not be a contract 
between the parties, whatever else it is capable of being, unless indeed 
the party receiving the thing so conducts himself as to lead the pro- 
poser reasonably to conclude that there is an acceptance according to 
the offer ; and then the proposer can hold him liable on the universal 
principle that a man's reasonably apparent intent is taken in law to be 
his real intent. We cannot suppose that the present section is intended 
to preclude all inquiries of this kind by making every receipt in fact of 
a thing offered by way of consideration a conclusive acceptance of the 
proposal. 



(a) Even the English doctrine (unknown maker of the deed is bound, not because a 

in India) that a covenant by deed is promise not communicated can of itself 

binding without communication to the be binding, but because he has solemnly 

covenantee is no real exception. The acknowledged himself to be bound. 

i.e. 4 



50 THE INDIAN CONTRACT ACT. 

S. 9. 9. In so far as the proposal or acceptance of any promise 

Promises, express made in words, the promise is said to be 
and implied. express. In so far as such proposal or accept- 
ance is made otherwise than in words, the promise is said to 
be implied. 

Express and tacit promises. This section assumes rather than lays 
down that which we have already found it needful to mention in the 
course of the commentary, namely, that both proposals and acceptances 
may take place without express words. An implied promise, in the sense 
of the Act, is a real promise, though not conveyed in words. It must be 
distinguished from the promises frequently said in English books to be 
implied by law, which were fictions required by the old system of pleading 
to bring cases of "relations resembling those created by contract " (ss. 68 
72, below) within the recognised forms of action, and sometimes to give the 
plaintiff the choice of a better form of action. Thus, if the plaintiff 
desired to sue for a liquidated sum in the general form of assumpsit instead of 
in the less convenient form of debt, the law conclusively " implied " a 
promise to pay the debt, though there might not have been any promise in 
fact. The actual promise " made otherwise than in words " is a matter of 
fact which in common law practice would be established by the verdict of a 
jury ; whereas in the case of the fictitious promise a jury might have to 
find the facts on which the law proceeded, but would not have been allowed 
to find that there was no real promise. 

A tacit promise may be implied from a continuing course of conduct as 
well as from particular acts. Thus an agreement between partners to vary 
the terms of the partnership contract may " either be expressed or be 
implied from a uniform bourse of dealing " (s. 252, p. 638, below, which 
reproduces well-settled English law). Where parties have acted on the 
terms of an informal document which has passed between them, but has 
. never been executed as a written agreement or expressly assented to by 
both, it is a question of fact whether their conduct establishes an implied 
agreement to be bound by those terms (b). 

The language of the section appears to assume that the terms of a 
contract may be (as undoubtedly they may, by familiar law and practice) 
partly express and partly implied. A term which, in the opinion of the 
Court, results from the true construction of the language used by the 
parties may be said to be implicit in that language, but in the sense of the 
present section it is not implied ; for it is contained in the words of the 

(b~) Brogden v. Metropolitan Hallway also be regarded as a case of acceptance 
Co. (1877) 2 App. Ca. 666. This might by acting on the terms of a proposal. 



EXPRESS AND TACIT PROMISES. 51 

agreement (V), though not apparent on the face of them. But there is Ss. 9, 10. 
a class of cases, of considerable importance t in England, where the parties 
are presumed to have contracted with tacit reference to some usage well 
known in the district or in the trade, and whatever is prescribed by that 
usage becomes an additional term of the contract, if not contrary to the 
general law or excluded by express agreement. Such terms are certainly 
implied, as resulting not from the words used, but from a general interpre- 
tation of the transaction with reference to the usual understanding of 
persons entering on like transactions in like circumstances. In India the 
only cases of this kind which have been reported in the High Courts appear 
to be on implied contracts to pay interest. Such a contract may exist by 
reason of mercantile usage (d~). The ground on which usages of this kind 
are enforced is not that they have any intrinsic authority, but that the 
parties are deemed to have contracted with reference to them. They need 
not, accordingly, be ancient or universal. It is enough that they are in fact 
generally observed by persons in the circumstances and condition of the 
parties. 

CHAPTER II. 

OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS. 

10. All agreements are contracts if they are made by 
What agreements the ^ ree consent of parties competent to con- 
tract, for a lawful consideration and with a 
lawful object, and are not hereby expressly declared to be void. 
Nothing herein contained shall affect any law in force in 
British India, and not hereby expressly- repealed, by which 
any contract is required to be made in writing or in the 
presence of witnesses, or any law relating to the registration 
of documents. 

The first paragraph of this section is developed and applied by the 
more specific provisions of several following sections, which will be 
considered as they occur. 

(c) We say agreement, not necessarily evidence of mercantile usage had not 
contract. It often depends on the true been sufficiently considered. On the new 
construction of an agreement whether it trial the evidence was found insufficient, 
is a contract or not. and on a fresh appeal the Judicial Com- 

(d) In Jugtjomoliun, G/tose v. Maniclt- mittee refused to disturb the judgment : 
rliund (1859) 7 M. I. A. 263, a new trial Jvggomohun Glwse v. Kalsreechund (1862) 
was ordered on the ground that the D M. I. A. 260. 

42 



52 THE INDIAN CONTRACT ACT. 

S. 10. As to contracts required to be in writing. See s. 25, sub-ss. 1 and 3, 

and s. 28, Exception :>.. See also Indian Companies Act VI of 1882, s. 11 
as to memorandum of association, s. 39 as to articles of association, and 
s. 67 as to contracts by companies. In this connection may also be noted 
the provisions of the Transfer of Property Act which require a writing in 
the case of a sale (s. 54), of a mortgage (s. 59), lease (s. 107), and gift 
(s. 123), and the provisions of the Indian Trusts Act which require a trust to 
be created in writing (s. 5) ; but these are not cases of contract in the proper 
sense of the word. Acknowledgments to save the law of limitation are 
required to be in writing by s. 19 of the Limitation Act XV of 1877. 
Submissions under the Arbitration Act IX of 1899 are similarly required 
to be in writing. 

Oral and documentary evidence. The Act does not deal with the 
kind of proof generally required to establish the facts constituting a 
contract. In British India the law on that subject is codified in the 
Evidence Act, I of 1872. See especially ch. VI. of that Act, ss. 91 sqq., 
as to the exclusion of oral by documentary evidence. 

Variance between print and writing. Print and other mechanical 
equivalents of handwriting are generally in the same position with regard 
to rules of evidence and construction. But where a contract is partly 
printed in a common form and partly written, the words added in writing 
are entitled, as Lord Ellenborough said in a judgment repeatedly approved (e), 
if there should be any reasonable doubt upon the sense and meaning of 
the whole, to have a greater effect attributed to them than to the 
printed words ; inasmuch as the written words are the immediate language 
and words selected by the parties themselves for the expression of their 
meaning, and the printed words are a general formula adapted equally to 
their case and that of all other contracting parties upon similar occasions. 
But the print is not to be discarded altogether, and the Court should 
discover the real contract of the parties from the printed as well as from 
the written words (/). 

As to the law relating to Registration. S. 17 of the Indian Registra- 
tion Act III of 1877 specifies documents which require to be registered ; 
and s. 49 of the same Act provides that no document required by s. 17 to 
be registered shall affect any immovable property, unless it has been 
registered in accordance with the provisions of that Act. 



(e) Robertson v. French (1803) 4 East, Co. (1889) 22 Q. B. Div. 499, 501. 

130, 7 R. R. 538, 540, approved in H. L., (/) Paul Seier v. CJiotalal Jarerdas 

Gli/nn v. Margetson [1893] A. C. 351, (1906) 30 Bom. 1. 
357; in C. A.. Standard Munne Insurance 



CAPACITY TO CONTRACT. 53 

11. Every person is competent to contract who is of the S. 11. 
who are com- a g e f majority according to the law to which 
petentto contract. he ig gub j ectj an( j W h is of sound mind, and 

is not disqualified from contracting by any law to which he 
is subject. 

This section deals wifch personal capacity in three distinct branches : 
(a) disqualification by infancy ; (b) disqualification by insanity ; (c) other 
special disqualifications by personal law. 

Infancy. As to infancy, the terms of the Act (g], as compared with 
the common law, were long a source of grave difficulty. By the common 
law an infant's contract is generally not void but voidable at his option ; 
if it appears to the Court to be for his benefit, it may be binding, and 
especially if the contract is for necessaries. There was formerly, however, 
a current opinion, countenanced by the lax forms in which some of the 
decisions were expressed, that infants' agreements were of three kinds : 
namely, that some were wholly void as being obviously not for the infant's 
benefit, some valid as being obviously for his benefit, and all others 
voidable. This opinion is now quite exploded (//-), but it was to be found 
in text-books at the time when the Indian Contract Act was framed. Still 
there was never any authority for saying that infants were absolutely 
incompetent to contract. The literal construction of the present section 
leads to the conclusion that being of the age of majority according to one's 
personal law is a necessary element of contractual capacity. Such capacity 
is not indeed expressly denied to persons who are not of full age, but a 
reader not acquainted with the rules of English law would naturally suppose 
that it was excluded by all but necessary implication. Since the Act, as a 
whole, purports to consolidate the English law of contracts, with only such 
alteration as local circumstances require, and there is no trace in the report 
prefixed to the original draft, or any other relative document, of any 
intention to make a jiew^ rule as to the contracts of minors, it is not 
surprising that the Indian High Courts endeavoured to avoid a construc- 
tion involving so wide a departure from the law to which they had been, 
accustomed ; but the Judicial Committee has now declared that the literal 
construction is correct, and has suggested that it was intended to give 
effect to the rule of Hindu law on the subject (i). 

(;/) They are almost identical with those (/<) Anson, Law of Contract, 10th ed. 

of the original draft. There is nothing to 121. 

show that the Commissioners were aware (/) Mohorl Bibee v. Dltvrmodas Ghose 

of any difficulty. Quccre whether they (1903) 30 Cal. 539, L. R. 30 Ind. Ap. 114. 
intended to alter the law. 



THE INDIAN CONTRACT ACT. 



S. 11. We may mention that in England the powers of infants to contract 

and to ratify their contracts have been much restrained by the Infants' 
Relief Act of 1874, a statute of good intentions and imperfect workmanship ; 
and the Sale of Goods Act, 1893, s. 2, has declared the liability of infants 
to pay a reasonable price (&) for necessaries sold and delivered to them, and 
has defined necessaries according to the latest and best judicial authorities. 
These enactments, of course, have no authority in India, and can be referred 
to only for the purpose of illustrating the common law rules. The result 
of the statutes is to bring the English law much nearer to the Anglo-Indian, 
for most practical purposes, than it might seem at first sight. We proceed 
to the details of the Anglo-Indian law. 

Age of majority. This is now regulated by the Indian Majority 
Act IX of 1875. S. 3 of the Act declares that every person domiciled in 
British India shall be deemed to have attained his majority when he shall 
have completed his age of eighteen years, and not before. In the case, 
however, of a minor of whose person or property or both a guardian has 
been appointed by a Court, or of whose property the superintendence is 
assumed by a Court of Wards, before the minor has attained the age of 
eighteen years, the Act provides that the age of majority shall be deemed 
to have been attained on the minor completing his age of twenty-one years. 
S. 2 of the Act declares that nothing in the Act contained shall affect the 
capacity of any person to act in matters of marriage, dower, divorce, and 
adoption. 

" Law to which he is subject." The age of majority as well as the 
disqualification from contracting is to be determined by the law to which the 
contracting party is subject. This provision is applied according to the 
principle of English law, namely, that the question of the capacity of 
a person to enter into a contract is decided by the law of his domicil, and 
not the law governing the substance of the contract. Thus in Kashiba v. 
Shripat (?) a Hindu widow above the age of sixteen and under the age of 
5 eighteen years, whose husband had his domicil in British India, executed 
a bond in Kolhapur (outside British India), where she was then residing. 
As the widow had not changed her domicil after her husband's death, her 
domicil was the same as that of her husband at his death, namely, British 
India. The question arose whether her liability on the bond was to be 
governed by the law of Kolhapur (lex loci coniractus}, or by the law of 
British India (law of her domicil). According to the law obtaining in 
Kolhapur, which is Hindu law unaffected by the Contract Act, she would 



(J(~) Tt need not be the price contracted 
for. We shall recur to the significance of 
this point. 



(0 (1894) lit Bom. 6!)7. See also 
Jtn/t ilk tin nil unil KmiKinn Banli, Ltd. v. 
Jfoir (1885) 7 All. 41)0. 



INFANCY. 55 

have been liable on the bond, as the age of majority according to that law S. 11. 
is sixteen years (in), and the bond was executed by her after she completed 
her sixteenth year. According to the law in British India, namely, the 
Contract Act, she was not liable, as the contract was made when she was 
under the age of eighteen years, and was not ratified by her after she 
attained her majority. It was held that her capacity to contract was 
regulated by the Contract Act, being the law of her domicil, and that 
under the Act she was not liable on the bond. 

Minor's contract. If the first branch of the rule laid down in the 
section be converted into a negative proposition, it reads thus : No person 
is competent to contract who is not of the age of majority according to the 
law to which he is subject ; in other words, a minor is not competent to con- 
tract. This proposition is capable of two constructions : either that a minor 
is absolutely incompetent to contract, in which case his agreement is void, 
or that he is incompetent to contract only in the sense that he is not liable 
on the contract though the other party is, in which case there is a voidable 
contract. If the agreement is void, the minor can neither sue nor be sued 
upon it, and the contract is not capable of ratification ; if it is voidable, 
he can sue upon it, though he cannot be sued by the other party, and the 
contract can be ratified by the minor on his attaining majority. The 
former current of Indian decisions was that, as under the English law, a 
minor's contract is only voidable at his option (w). But in 1903 the 
point came before the Judicial Committee (0), on the question whether 
s. 64 of the Act, which deals with the rescission of voidable contracts and 
the duty of the party rescinding to restore any benefit received, applies to 
the contracts of infants. Admitting the general current of decision in 
India to have been in favour of holding such contracts only voidable, their 
Lordships considered themselves free to act on their own view ; and having 
regard to the terms of ss. 2 and 10, as well as of the present section, they 
held that " the Act makes it essential that all contracting parties should be 
competent to contract," and especially provides that a person who by 
reason of infancy is incompetent to contract cannot make a contract within 
the meaning of the Act. It was accordingly held in that case that a 

O) See Mayne's Hindu Law, s. 210, case) ; Sadashiv v. Trinibalt (1898) 23 

(Jth ed. (1900). Bom. 146, the former decisions followed 

(w) Saslii Bhman v. Jadu Nath (1885) with some hesitation. The decision of 

11 Cal. 552 ; Hanmant v. Jayarao (1888) the Judicial Committee stated in the text 

13 Bom. 50; Mahomed Arif v. Saraxwati makes it useless to give details of these 

(1891) 18 Cal. 259 ; contra, perNorris, J., judgments. 

Fat him v. Drlimuth (1893) 20 Cal. 508; () Mohnrl Bllee v. Dlnirmodas Ghosc., 

and see Ka*li>l><i. v. Shr'ijmt (1894) 19 Bom. 30 Cal. 539, L. R. 30 Ind. An. 114, 
97 (no decision on the point in either 



56 THE INDIAN CONTRACT ACT. 

S. 11. mortgage made by a minor is void, and a money-lender who lias 
advanced money to a minor on the security of the mortgage is not entitled 
to repayment of the money under ss. 64 and 65 on a decree being made 
declaring the mortgage invalid. That decision is also an authority for the 
proposition that the circumstances of a particular case may be such that, 
having regard to s. 41 of the Specific Relief ActQp), the Court may, on 
adjudging the cancellation of an instrument, require the party to whom 
such relief is granted (though he be a minor) to make any compensation to 
the other which justice may require. Hence where a claim for compensa- 
tion is based upon that section, the Court may order a return of the money 
to the lender if under the circumstances of the case justice requires it to 
do so (q). 

A mortgage in favour of a joint Hindu family is not void because 
it happens to be executed in the name of a member of the family who 
at the time of execution is a minor (r). 

As it is now finally settled that a minor's agreement is void, it follows 
that there can be no question of ratifying it. Upon the same principle a 
promissory note, given by a person on attaining majority in settlement 
of an earlier one signed by him while a minor in consideration of money 
then received from the obligee, cannot be enforced in law. Such a note, it 
has been held by the Madras High Court, is void for want of considera- 
tion (s). In a recent Calcutta case (/) a bond was executed by 
S., after attaining majority, promising to pay within a year Rs. 7,000, 
being the price of piece goods sold to him during his minority, and also to 
repay Rs. 76 advanced to him for necessaries. The obligee sued S. on the 
bond, and it was held that S. was liable. The Court said : " Here the 
contract on which the suit is brought is by a defendant of full age, it is a 
new contract, by it the plaintiff has debarred himself from suing until the 
expiration of one year after the date of the contract for moneys which are 
alleged to be due at the date of the contract, and she has made an advance 
of Rs. 76. There was thereupon a new consideration for the promise on 
which the defendant is sued, and in my opinion, in the absence of any 
statutory provision such as that to be found in England in s. 2 of the 

(]>) That section provides that on with Mohorl Sibee v. Dhurmodas Ghote, 

adjudging the cancellation of an instru- note (?) above ; Indar Singh v. Narindur 

ment the Court may require the party to Singh (1904) Punj. Rec. no. 33. 

whom such relief is granted to make any (/) Meghan Dube v. Pran Singh (1908) 

compensation to the other which justice 30 All. 63. 

may require. () Indrau Ramaswami v. Anthappa 

(?) Dattaram v. Vlnayak (1903) 28 Chettiar (1906) 16 Mad. L. J. 422. 

Bom. 181 ; Kamta Prasad v. Sheo Gopal (f) Kundan Sibi v. Sree Narayan 

Lai (1904) 26 All. 342, a case on all fours (1906) 11 C. W. N. 135. 



AGREEMENTS WITH MINORS. 57 

Infants' Relief Act, 1874, he is liable." The only difference between this S. 11. 
and the Madras case, so far as the note sued upon goes, is that in the latter 
case there was a promissory note passed during minority, and the note was 
renewed by the defendant on attaining majority, while in the Calcutta case 
there was no bond passed during minority, but the bond was executed for 
the first time after attaining majority. 

This circumstance, however, cannot make any difference in principle, 
nor is there anything in the judgment in the Calcutta case to show that the 
decision proceeded upon any such difference. The ground of the decision 
was that there was a neiv consideration for the promise on which the 
defendant was sued. We fail to see how either the forbearance to sue or 
the advance for necessaries could be regarded as a new consideration, and 
we are of opinion that the decree so far as it awarded to the plaintiff the 
price of the goods sold was erroneous in law. In England it is not clear 
that money advanced to a minor for the purchase of necessaries and 
actually expended thereon may not be recovered as having been itself 
a necessary. 

The decision of the Judicial Committee has been followed by the High 
Courts of Bombay (tt) and Allahabad (x). 

Necessaries. S. 68 provides for liability in respect of necessaries 
supplied to a person incapable of entering into a contract. A minor is a 
person incapable of contracting within the meaning of that section (y), and, 
therefore, the provisions of that section apply to his case. It will be 
observed that the minor's property is liable for necessaries, and no personal 
liability is incurred by him, as it may be under English law. S. 70 cannot 
be read so as to create any personal liability in such a case. Under English 
law the liability is not on the express promise, if any there be ; the obliga- 
tion is quasi ex contracfu to pay a reasonable price for necessary goods 
supplied : Sale of Goods Act, 1893, s. 2. It would probably be held that 
this only declares the common law (2), and, therefore, that the rule is the 
same as to necessaries other than goods. Necessaries must be things which 
the minor actually needs ; therefore it is not enough that they be of a kind 
which a person of his condition may reasonably want for ordinary use ; 
they will not be necessary if he is already sufficiently supplied with things 
of that kind, and it is immaterial whether the other party knows this or 

(u) Dattaram v. Vitiayak (1903) 28 contract. 

Bom. 181. (y) Watkins v. Dhunnoo Baboo (1881) 

(x) Kamta Prasad v. Sheo Gopul Lai 7 Cal. 140, 143 ; Mohori It'ibee v. Dhur- 

(1904) 26 All. 342. Held in both cases modas Ghose, note(t), p. 53, above, 

that the provisions of ss. 64, 65, below, (r) See A .?/< v. Inman [1908] 2K. B. 1, 

are not applicable to a minor's agreement, C. A., especially the judgment of Fletcher 

as there has never been even a voidable Moulton, L.J. 



58 THE INDIAN CONTRACT ACT. 

S. 11. not (a). It may be presumed that Anglo-Indian Courts would follow the 
English decisions on this point, which does not appear to be precisely 
covered by the language of s. 68. Objects of mere luxury cannot be 
necessaries, nor can objects which, though of real use, are excessively 
costly. The fact that buttons are a normal part of many usual kinds 
of clothing, for example, will not make pearl or diamond buttons 
necessaries (b). 

Specific Performance. A minor's agreement being now decided to be 
void, it is clear that there is no agreement to be specifically enforced ; and 
it is unnecessary to refer to former decisions and distinctions, following 
English authorities which were applicable only on the view now overruled 
by the Judicial Committee. But though an agreement entered into by a 
minor himself cannot be specifically enforced, it has been held by a Full 
Bench of the Calcutta High Court that, if a contract is validly entered 
into on behalf of a minor by his guardian, and there is mutuality in the 
contract, it may be specifically enforced (/). And as no contract that is not 
for the benefit of a minor can be said to have been validly entered into on 
his behalf, it follows that the courts will not enforce specific performance 
of contracts that are not for the benefit of the minor (d). "A court will 
never enforce specific performance against a minor when such enforcement 
is to his detriment " (e). Thus where the certificated guardian of a minor 
obtained the sanction of the District Judge for the sale of the minor's 
property to A. B. at Rs. 725, and subsequently, on receiving an offer for 
Rs. 825 from C. D., she obtained the sanction of the Court for the sale 
to C. D. at Rs. 825, and sold the property to him, it was held, in a suit 
by A. B. against the guardian for specific performance, that the contract 
with A. B. was manifestly to the detriment of the minor and could not be 
specifically enforced (/). 

Fraudulent representation. It is well established in English law that 
an infant cannot be made liable for what was in truth a breach of contract 
by framing the action ex Micto. " You cannot convert a contract into 

(a) Johnstone v. Marks (1887) 19 (c) Mir Sarwarjan v. Fakharuddin 

Q. B. D. 509. Previous decisions were (1906) 31 Cal. 163. 

conflicting, but the point may now be (d) Etwarta v. Cliandra Nath (1906) 

taken as settled. Cp. the Sale of Goods 10 C. W. N. 763; Jaimetji v. Kaxhi until 

Act, 1893, s. 2. (1901) 26 Bom. 326, 337 ; Khairunncxsa 

(t>) The classical English authority is Sibiv. Luke A'ath (1899) 27 Cal. 276. 

llyder v. WombwcU (1868) L. R. 4 Ex. (e) Chhitar Mai v. Jag an Nath Prasad 

32. The minuteness of the English cases (1907) 29 All. 213. 

on this point seems due, as matter of fact, (/) Ibid. See also Waghela, Rajsanjl 

to the general bias of juries in favour of v. Shekh Maxludin (1887) 11 Bom. 551, 

tradesmen, and their opinion that it is L. R. 14 Ind. Ap. 89. 
shabby to plead infancy. 



SPECIAL DISQUALIFICATIONS. 59 

a tort to enable you to sue an infant "(#). Following this principle, it has been S. 11. 
held in India that a personal decree cannot be passed against a minor for 
money received by him from the lender on a fraudulent representation that he 
is of full age (K). But where the repayment of the loan so obtained is secured 
by a mortgage of the minor's property, the Court has the power to pass a 
mortgage decree, though it may in particular cases decline to allow interest 
and costs to be added to the mortgage debt (). 

" Of sound mind.'' See s. 12 for the definition of soundness of mind. 
By English law a lunatic's contract is not void, but voidable at his option, 
and this only if the other party had notice of his insanity at the time of 
making the contract (Jc). But, after the decision that this section makes a 
minor's agreement wholly void, it is clear that a person of unsound mind 
must in British India be held absolutely incompetent to contract. And it 
has in fact been held to be so in a recent Madras case (/). The supply of 
necessaries to lunatics, among other persons " incapable of entering into a 
contract," is dealt with by s. 68 of the Act ; see the illustrations. 

Persons otherwise " disqualified from contracting." The capacity of 
a woman to contract is not affected by her marriage either under the 
Hindu or Mahomedan law. A Hindu female is not, on account of her sex, 
absolutely disqualified from entering into a contract ; and marriage, what- 
ever other effect it may have, does not take away or destroy any capacity 
possessed by her in that respect. It is not necessary to the validity of the 
contract that her husband should have consented to it. When she enters 
into a contract with the consent or authority of her husband, she acts as 
his agent, and binds him by her act ; and she may bind him by her 
contract, in certain circumstances (in), even without his authority, the law 
empowering her on the ground of necessity to pledge her husband's credit. 
Otherwise a married woman cannot bind her husband without his authority, 
but she is then liable on the contract to the extent of her slridhanam 
(separate property) (n). Similarly, a married Hindu woman may contract 
jointly with her husband, but then she is liable to the extent of her 
siridhanam only (0). In the same way a married Mahomedan woman 

(//) Jennings v. Rundall (179!)) 8 T. R. (7) Macliaima v. Usman Bean (1907) 

335, 4 R. R. 680. 17 Mad. 78. 

(/(.) Dhan Mull v. Ram Chunder (1 897) (/.) E.g., pressing necessity: Pusi v. 

24 Cal, 2fi5. Mafiadeo Prasad (1880) 3 All. 122, at p. 1 24. 

(/') Saral Chand Slitter v. Sreemutty (n) Per Cur. in Nathubhai v. Jarher 

Molmn JliU (1898) 2 C. W. N. 18, (1876) 1 Bom. 121. 

.affirmed on appeal, if>., p. 201. (<>) Govindji, v. Lakmida*(1873) 4 Bom. 

(/O Imperial Loan Co. v. Stone. [1892] 318; Narotam v. NanJta, (1882) (i Bom. 

1 Q. E. 599, C. A., confirming previous 473. 
authorities. 



GO THE INDIAN CONTRACT ACT. 

S. 11. is not by reason of her marriage disqualified from entering into a 
contract. 

Turning next to persons of other denominations, there are two Indian 
enactments that create the separate property of married women, and 
impliedly confer upon them, as an incident of such property, the capacity 
to contract in respect thereof. The one is the Indian Succession Act X of 
1865, s. 4, and the other the Married Women's Property Act III of 1874. 
Both these enactments apply to the whole of British India, but neither of 
them applies to any marriage one or both of the parties to which professed, 
at the time of the marriage, the Hindu, Mahomedan, Buddhist, Sikh, or 
Jaina religion (p). S. 4 of the Succession Act provides that no person 
shall by marriage acquire any interest in the property of the person whom 
he or she marries, nor become incapable of doing any act in respect of his 
or her own property which he or she could have done if unmarried. The 
effect of this was that on or after January 1st, 1866 (q), all women married 
to whose marriages the Act applied became absolute owners of all property 
vested in, or acquired by, them, and their husbands did not by their 
marriage acquire any interest in such property (r). It was subsequently 
considered expedient to make due provision for the enjoyment of wages 
and earnings by women married before 1866 (r), and the Married Women's 
Property Act enacted that the wages and earnings of any married woman 
acquired or gained by her after the passing of that Act in any employment, 
occupation, or trade carried on by her, and all money or other property 
acquired by her through the exercise of any literary, artistic, or scientific 
skill, should be deemed to be her separate property (s. 4). The Act also 
provides that a married woman may sue and may be sued in her own name 
in respect of her separate property (s. 7), and that a person entering into 
a contract with her with reference to such property may sue her, and to 
the extent of her separate property recover against her, as if she were 
unmarried (s. 8). 

Certain classes of persons may be disqualified under certain enactments 
from entering into contracts in respect of matters specified in those 
enactments. Thus where a person in Oudh is declared a "disqualified 
proprietor" under the provisions of the Oudh Land Revenue Act, 1876, 
he is not competent to alienate his property, and the same incapacity 
extends to contracts entered into by him, though they relate to property 
situate outside the province of Oudh (/). 



(p) See Act III of 1874, s. 2, and Act X (r) See the preamble to Act III of 1874. 
of 1865, s. 331. (t) Laclinie Narain v. Fateh Bahadur 

(y) Act X of 1865, s. 331. Sinffh (1902) 25 All. 195, 202. 



WHAT IS SOUND MIND. 61 

12. A person is said to be of sound mind for the purpose S. 12. 
of making a contract if, at the time when he 

What is a sound . 

mind for the pur- makes it, he is capable of understanding it and 

poses of contracting. . j- i .j -i. ff j. 

or forming a rational judgment as to its enect 
upon his interests. 

A person who is usually of unsound mind, but occasion- 
ally of sound mind, may make a contract when he is of 
sound mind. 

A person who is usually of sound mind, but occasionally 
of unsound mind, may not make a contract when he is of 

unsound mind. 

Illustrations. 

(a) A patient in a lunatic asylum, who is at intervals of sound 
mind, may contract during those intervals. 

(b) A sane man, who is delirious from fever, or who is so drunk 
that he cannot understand the terms of a contract, or form a rational 
judgment as to its effect on his interests, cannot contract whilst such 
delirium or drunkenness lasts. 



Doubtful effect of the section. The difficulty of understanding what 
is really the effect of this section, in conjunction with s. 11, has already 
been pointed out. The presence or absence of the capacity mentioned in 
this section at the time of making the contract is in all cases a question of 
fact. Where a person is usually of unsound mind, the burden of proving 
that at the time of the contract he was of sound mind lies on the person 
who affirms it. In cases, however, of drunkenness or delirium from fever 
or other causes, the onus lies on the party who sets up that disability to 
prove that it existed at the time of the contract. Questions of undue 
influence and of incapacity by reason of unsoundness of mind must not be 
mixed up, involving as they do totally different issues (M). 

The second paragraph of the section provides that a person who is 
usually of unsound mind, but occasionally of sound miud, may make a con- 
tract when he is of sound mind. Thus even a patient in a lunatic asylum 
may contract during lucid intervals (see illustration (a) ). The question 
may arise whether a lunatic adjudged to be so under Act XXXIV of 1858 
or Act XXXV of 1858 (#), and of whose property a committee or manager 

(u) Sayad Muhammad v. Fatteh founded, to some extent, on 16 & 17 Viet. 

Muhammad (1894) L. E. 22 Ind. Ap.. c. 70 (the Lunacy Regulation Act, 1853, 

pp. 4, 10, 22 Cal. 324 ; Durga Salthsh no longer in force in England), and 

Singh v. Mirza MuJtammad Ali Beg applies to proceedings in lunacy in 

(1904) L. R. 31 Ind. Ap. 235. chartered High Courts, and the second to 

(*) The first of these two Acts is proceedings in Mufassal Courts. 



62 



THE INDIAN CONTRACT ACT. 



Ss. 12, 13. is appointed, can contract during intervals of sound mind. In England, 
a lunatic not so found, or before he is so found, by inquisition is not by 
reason of that fact absolutely incapable of contracting, though the burden 
of proof in such a case is on the party maintaining that he is not insane, 
or that the contract was made during a lucid interval (y) ; and the same 
would appear to be the law in India. Where, however, a committee or a 
manager of the estate of a lunatic adjudged to be so is appointed under 
either of the Indian Acts, no contract can be entered into by a lunatic in 
respect of his estate even though at the time of the contract he may be in 
a lucid interval. Similarly it is now settled in England that a person 
found lunatic by inquisition is incapable of dealing with his property 
inter vivos while the inquisition is in force (z). 



13.- 

" Consent " 
defined. 



-Two or more persons are said to consent when 
they agree upon the same thing in the same 
sense. 



Apparent and real consent. The language of this section is, on the 
face of it, more of a judicial or expository than of a legislative kind. As 
an authoritative definition it does not seem to define very much. It would 
need some courage to maintain that persons can be said to consent when 
they do not agree upon the same thing, or that if they do not agree in the 
same sense they can be said to agree in any sense at all. 

If the section is to cover all kinds of contracts, as presumably it does, 
the word " thing " must obviously be taken as widely as possible, though 
it seems most appropriate where the contract has to do with corporeal 
property. We must understand by " the same thing " the whole content of 
the agreement, whether it consists, wholly or in part, of delivery of material 
objects, or payment, or other executed acts, or promises. The phrase comes 
originally from the New York Civil Code, but it has, at all events, high 
judicial sanction, and the passage in which it was used by the late Lord 
Hannen, in the year before this Act was passed, is perhaps the best 
commentary on the general significance of the present section : 

" It is essential to the creation of a contract that both parties should 
agree to the same thing in the same sense. Thus if two persons enter 
into an apparent contract concerning a particular person or ship, and it 
turns out that each of them, misled by a similarity of name, had a different 



(>j) Ilall v. Warren (1805) 9 Ves. 605, 
7 R. R. 306, to which Siwolt v. Watts, 
(1818) 11 Beav. 105, adds nothing 
material. 



00 Re. Walker [1905] 1 Ch. 160, C. A. 
Of a will it is otherwise for the reason 
explained ib, at p. 172. 



CONSENT. 63 

person or ship in his mind, no contract would exist between them : Raffles S. 13. 
v. Wuh&lhaus (a). 

" But one of the parties to an apparent contract may, by his own fault, 
be precluded from setting up that he had entered into it in a different 
sense to that in which it was understood by the other party. Thus in the 
case of a sale by sample where the vendor, by mistake, exhibited a wrong 
sample, it was held that the contract was not voided by this error of the 
vendor : Scott v. Littledale (I). 

"But if in the last-mentioned case the purchaser, in the course of the 
negotiations preliminary to the contract, has discovered that the vendor 
was under a misapprehension as to the sample he was offering, the vendor 
would have been entitled to show that he had not intended to enter into 
the contract by Avhich the purchaser sought to bind him. The rule of law 
applicable to such a case is a corollary from the rule of morality which 
Mr. Pollock (c) cited from Paley (d), that a promise is to be performed 
' in that sense in which the promisor apprehended at the time the promisee 
received it,' and may be thus expressed : ' The promisor is not bound to 
fulfil a promise in a sense in which the promisee knew at the time the 
promisor did not intend it.' And in considering the question in what 
sense a promisee is entitled to enforce a promise it matters not in what 
way the knowledge of the meaning in which the promisor made it is 
brought to the mind of the promisee, whether by express words, or by 
conduct, or previous dealings, or other circumstances. If by any means 
he knows that there was no real agreement between him and the promisor, 
he is not entitled to insist that the promise shall be fulfilled in a sense to 
which the mind of the promisor did not assent " (e). 

0) 2 H. & C. 906 ; Finch, S. C. 459. Queen's Bench Divisions of the High 

This is a very peculiar case of an equivocal Court of Justice (died 1897). 
term understood in different senses by the (d) Moral and Political Philosophy, 

parties. There were two ships of the Book III. Chap. V. Paley's rule, however, 

same name sailing at different times. The is not quite correct. The true test is not 

decision was on the pleadings, so that the what either promisor or promisee actually 

questions of fact which might arise in the thought, but the sense in which the 

proof of such a defence were not and promise would reasonably be understood 

could not be considered. by the promisee : Whately's note to 

(V) 8 E. & B. 815 ; Finch, S. C. 460. Paley, I.e., and per Blackburn, J., in 
(Note that the sale was of a specific cargo, Foiokes v. Manchester and, London Assur- 
ed the seller misled the buyer, though ance Association (1863) 3 B. & S. 917,929. 
innocently. If any one was entitled to See an ingenious paper on this note by 
set aside the contract, it was the buyer.) Priya Nath Sen in Calc. Law Journ., March, 

(c) Charles Pollock, then Q.C., after- 1905, and note thereon in L.Q.R. xxi. 219. 
wunls a Baron of the Court of Exchequer () Per Hannen, J., Smith v. 

and a member of the Exchequer and (1871) L. 11. 6 Q. B. p. 609. 



64 



THE INDIAN CONTRACT ACT. 



S. 13. Students and young practitioners must be warned not to exaggerate 

the working importance of cases which are quoted and discussed for the 
very reason that they are exceptional. Generally parties who have concurred 
in purporting to express a common intention by certain words cannot be 
heard to deny that what they did intend was the reasonable effect of those 
words ; and that effect must be determined, if necessary, by the Court, 
according to the settled rules of interpretation. Whoever becomes a 
party to a written contract " agrees to be bound, in case of dispute, by 
the interpretation which a Court of law may put upon the language of the 
instrument," whatever meaning he may attach to it in his own mind (/). 
Exceptions to this rule exist, but they are admitted only for special and 
carefully limited reasons. 

Warning is also still needed, having regard to the language current in 
all but the most modern text-books, against the habit of using the word 
" mistake " as if it denoted any general legal principle, or was capable, 
taken alone, of explaining any departure from the normal grounds of 
decision (g). 

Ambiguity. Sometimes an apparent agreement can be avoided by 
showing that some term (such as a name applying equally to two different 
ships) is ambiguous, and there has been a misunderstanding without fault 
on either side. Such cases, however, are in fact extremely rare. It usually 
turns out either that the terms have an ascertained sense by which both 
parties are bound, and there is a contract which neither can dispute, what- 
ever either of them may profess to have thought, or that, when the facts 
are established, there was really never a proposal accepted according to 
its terms, and therefore the conditions of a binding contract were not 
satisfied. Many of the cases cited in the books under the head of mistake 
belong to the latter class, as where a broker employed to sell goods delivered 
to the intending vendor and the intending purchaser two sale-notes describ- 
ing goods of different qualities (h). " The contract," said the Court, " must 
be on the one side to sell, and on the other side to accept, one and the 
same thing." No such contract being shown on the face of the transaction, 
there was no need to say, and the Court did not say, anything about 
mistake. In a later case the defendant wanted to order three rifles by 
telegraph, and a blunder in transmitting the message turned three into the, 
which the plaintiff naturally took as referring to the number of fifty men- 
tioned in a previous letter. Here it was held that the telegraph clerk had 



(/) Per Lord Watson, Stewart v. 
Kennedy (1890) 15 App. Ca. 108, 123. 

(g) Sir W. Anson's pages on this subject 
(Law of Contract, Chap. IV. s. 1) should 
be carefully read by all students. They 



are the most concise exposition to be 
found in English books of repute, and one 
of the most accurate. 

(/*) Thornton v. Kempder (1814) 5 
Taunt. 786, 15 K. E. 658. 



FUNDAMENTAL ERROR. 



65 



no authority to send the message except as it was delivered to him, so that 
the message as communicated to the plaintiff was not the defendant's offer 
at all (i). This, again, has really nothing to do with mistake in point of 
law. It was immaterial whether the wrong message was sent by the clerk's 
mistake, or by fraudulent alteration, or through some external accident, 
such as a thunderstorm, affecting the instruments. Similarly if the 
addressee of a cipher or code message conveying a proposal misreads the 
proposal not unreasonably, and accepts it according to his own under- 
standing, he cannot be held bound to the contract which the proposer 
intended. If the terms are really ambiguous there is nothing, in such a 
case, which either party can enforce (7c). 

Fundamental Error. In certain classes of cases there may be all the 
usual external evidence of consent, but the apparent consent may have 
been given under a mistake, which the party is not precluded from showing, 
and which is so complete as to prevent the formation of any real agree- 
ment " upon the same thing." Such fundamental error may relate to the 
nature of the transaction, to the person dealt with, or to the subject-matter 
of the agreement. 

As to the nature of the transaction. A rftan who has put his name 
to an instrument of one kind understanding it to be an instrument of a 
wholly different kind may be entitled, not only to set it aside against the 
other party on the ground of any fraud or misrepresentation which caused 
his error, but to treat it as an absolute nullity, under which no right can be 
acquired against him by any one. In a modern case the defendant had 
purported to endorse a bill of exchange which he was told was a guaranty. 
The plaintiff was a subsequent holder for value, and therefore the fact that 
the defendant's signature was obtained by fraud would not have protected 
him in this action. But the Court held that his signature, not being 
intended as an endorsement of a bill of exchange, or as a signature to any 
negotiable instrument at all, was wholly inoperative, as much so as if the 
signature had been written on a blank piece of paper first, and a bill or 
note written on the other side afterwards (/). There are much older 
authorities showing that if a deed is falsely read over to an illiterate man, 
and he executes the deed relying on the false reading as being the true 
substance of the transaction, his act is wholly void (m). 



S. 13. 



(*) Uenkel v. Pape (1870) L. R. 6 
Ex.7. 

(k) Falckv. Williams [1900] A. C. 176, 
a decision of the Judicial Committee on 
very peculiar facts. 

(I) Foster v. MacTilnnon (18G9) L. R. 
4 C. P. 704, Finch, S. C. 434. " 

I.C. 



(m) Thorougkgood's Case, 2 Co. Rep. 
9 b, and other books cited in Foster v. 
Mackinnon. There are modern cases in 
equity illustrating the same principle, but 
they are not so decisive, and can hardly 
be understood without knowledge of 
English equity practice. It is sufficient 



66 THE INDIAN CONTRACT ACT. 

S. 13. We may expect to find fraud as an element in cases of this class. But 

it is not the decisive element. A signature attached to a document 
supposed to be of a wholly different kind, or not to contain a clause so 
important as substantially to alter its character, is invalid unless the 
signer is estopped by negligence from denying that he understood what 
he was signing, and this " not merely on the ground of fraud, where fraud 
exists, but on the ground that the mind of the signer did not accompany 
the signature ; in other words, that he never intended to sign, and there- 
fore in contemplation of law never did sign, the contract to which his 
name is appended" (ri). Neither is fraud a necessary element. The 
principle was applied by the High Court of Bombay, while this Act 
was still recent, to a case (0) where, in very peculiar circumstances, 
there was a misrepresentation by inadvertence, but no question of 
fraud. There the plaintiffs, who were creditors of the defendants, 
sued to have the signature of their agent to a composition deed 
cancelled, 'and to have it declared that the deed was not binding on the 
plaintiffs. The deed was signed under these circumstances : the 
defendants' firm had suspended payment, and at a creditors' meeting ib 
was resolved that the business of the defendants' firm should be wound up 
by voluntary liquidation under the supervision of a committee. This 
resolution was confirmed at a subsequent meeting, and it was further 
resolved that a composition deed should be prepared in pursuance of the 
above resolutions. No mention was made at either of the meetings of any 
release of the claims of the creditors. After a few days a deed was 
tendered by one of the defendants' firm to the plaintiffs' agent for 
execution. He was then engaged with urgent English mail business, and 
he declined to sign it without being able to read it. The debtor then 
earnestly pressed him to execute the document at once, stating that it was 
of the utmost importance that no time should be lost, and adding that the 
deed was nothing more than an assignment to trustees for the benefit of 
creditors as agreed to at the creditors' meeting. Upon the faith of that 
assurance the plaintiffs' agent executed the deed. As a matter of fact the 
deed contained a release by the creditors to the debtors. As soon as the 
plaintiffs' agent came to know of this he repudiated his signature and 
refused to be bound by the deed. On behalf of the plaintiffs it was 
contended that the deed, so far as it operated as a release, was a different 
deed from that which the plaintiffs' agent intended to execute, or thought 

to refer to Howatson v. Webb [1908] 1 (n) Foster v. Mackinnon, L. R. 4 C. P. 

Ch. 1, C. A., which tends to show that at p. 711. 

some of the earlier authorities must be () Oriental Hank Corporation v. 

used witli caution. See also Dagdu v. Fleming (1879) 3 Bom. 242. 

Bhana (1904) 28 Bom. 420. 



CONSENT AND ESTOPPEL. 67 

he was executing, and that his signature could not therefore be held to be S. 13. 

a consent to its contents. This argument was upheld, and it was declared 

that the deed was not the deed of the plaintiffs so far as it purported to 

operate as a release to the debtors. The Court proceeded further to hold 

that the transaction was brought about by misrepresentation within the 

meaning of s. 18, cl. 2 (which see below). It is difficult to see why 

sub-s. 2 was more in point than sub-s. 1 ; but in any case it would seem 

that, having found that the supposed contract was void because there was 

no contract at all, the Court had no need to consider whether or not the 

consent, if any, was free within the meaning of s. 14 (p). In a recent 

Calcutta case, where a document was signed only on the first page, but was 

not signed on the other pages, the executant having discovered that it was 

not in accordance with the terms previously agreed upon, it was held that 

the document was a nullity (g). 

Consent and Estoppel. The Indian Courts have followed English 
authority in holding that, in normal circumstances, a man is not allowed 
to deny that he consented to that which he has in fact done, or enabled to 
be done with his apparent authority. Thus when a person entrusts to his 
own man of business a blank paper duly stamped as a bond and signed and 
sealed by himself in order that the instrument may be drawn up and money 
raised upon it for his benefit, if the instrument is afterwards duly drawn up 
and money obtained upon it from persons who have no reason to doubt the 
good faith of the transaction, it is presumed that the bond was drawn in 
accordance with the obligor's wishes and instructions (r). As to inchoate 
stamped negotiable instruments provision is made by the Negotiable 
Instruments Act XXVI of 1881, s. 20, which is as follows : " When one 
person signs and delivers to another a paper stamped in accordance with 
the law relating to negotiable instruments then in force in British India, 
and either wholly blank or having written thereon an incomplete negotiable 
instrument, he thereby gives primd facie authority to the holder thereof to 

(p) It will be seen in this case that the eleineut of truth in it is that A., who has 

mistake as to the nature of the transaction misled B., however innocently, is estopped 

was caused by the misrepresentation of from disputing the validity of the 

the other contracting party. Sir W. K. contract as against B., if it turns out to 

Anson suggests (Principles of the Law of be B.'s interest to affirm it. But still the 

Contract, p. 147) that in such a case the transaction is void in the sense that even 

contract is only voidable for misrepre- innocent third persons cannot acquire 

sentation, and that it is void on the rights under it against B.'s will, 

ground of mistake only if the mistake is (#) Banltu Behari Shaha v. Krlshto 

brought about by the act of a third party. Guhindo (1903) 30 Cal. 433. 

This view is not supported by any English (r) Wahidunnessa v. Surgadass (1879) 

authority, and is contrary to Oriental 5 Cal. 39. 
Bank Corporation v. Fleming. The 

52 



68 THE INDIAN CONTRACT ACT. 

S. 13. make or complete, as the case may be, upon it a negotiable instrument for 
any amount specified therein and not exceeding the amount conveyed by 
the stamp. The person so signing shall be liable upon such instrument, in 
the capacity in which he signed the same, to any holder in due course for 
such amount, provided that no person other than a holder in due course 
shall recover from the person delivering the instrument anything in excess 
of the amount intended by him to be paid thereunder." As to the existence 
or non-existence of apparent authority in particular circumstances very 
delicate questions may arise under the law and practice of English company 
business. It would not be useful to pursue these here (s). 

Parda-nishin cases. It might be possible to refer to this head some 
of the cases in which the gifts or other acts, practically amounting to acts 
of bounty, of parda-nishin (/) women have been set aside. But it is 
certainly not necessary for this purpose to show that the nature of the act 
was not understood at all. The jurisdiction rests on a presumption of 
imperfect knowledge of the world and exposure to undue influence, making 
it the duty of a person taking a beneficial grant or contract from a 
parda-nishin woman to show that the deed was explained to her and 
understood by her (u), so that the ordinary burden of proof is reversed. 
These cases accordingly belong to the head of undue influence. 

Error as to the person of the other party. There can be no real 
formation of an agreement by proposal and acceptance unless a proposal 
is accepted by the person, or one of a class or number of persons, to whom 
it is made. Similarly the acceptance must be directed to the proposer, or 
at least the acceptor must have so acted as to entitle the proposer to treat 
the acceptance as meant for him. The acceptance of an offer not directed 
to the acceptor may occur by accident, as where a man's successor in 
business receives an order addressed to his predecessor by a customer who 
does not know of the change, and executes it without explaining the facts. 
Here no contract is formed (#). But the buyer would be bound, as on a 
new contract, if after notice he treated the sale as subsisting (y). This 
kind of case is very unusual. Acceptance intended for a person other 

0) George Whitechurch, Ltd. v. (a?) Soulton v. Jones (1857) 2 H. & N. 

Cavanagh [1902] A. C. 117; Ruben v. 564, Finch, S. C. 450. See Benjamin on 

Great Fingall Consolidated [1904] 2 Sale, 5th ed. 95, 96, where the learned 

K. B. 712, C. A. author's suggestion of some different 

(f) The current Anglo-Indian spelling equitable rule is not supported by his 

-noshin is a mere blunder. It does not latest editors. The present writer was 

even represent a current mispronuncia- never able to accept it. 

tion. (y) See Mitchell v. Lapage (1816) 

(M) Annoda Mohun. Eai v. Bhutan Holt, N. P. 253, 17 R. R. 633. 
Mohini Deli (1901) 28 Cal. 546, 548. 



ERROR AS TO PERSON OF OTHER PARTY. 69 

than the person actually making the offer might possibly happen by S. 13. 
accident, but in the reported cases it has been the result of fraudulent 
personation. The proposer has obtained credit, in effect, by pretending to 
be some person of credit and substance known to the acceptor, or the 
agent of such a person. In Gundy v. Lindsay (z), one Blenkarn closely 
imitated the address of a known respectable firm of Blenkiron & Co., and 
wrote his signature so as to look like theirs. A dealer to whom he wrote 
to order goods thought, as Blenkarn intended, that the order came from 
Blenkiron & Co., and sent the goods to the address given. It was held 
by the Court of Appeal and the House of Lords that, as the senders 
thought they were dealing with Blenkiron & Co., and knew nothing of 
Blenkarn, and had no intention of dealing with him, there was no contract, 
and Blenkarn acquired no property in the goods. Accordingly an innocent 
buyer of the goods stolen goods, as they really were from Blenkarn had 
no defence to an action by the original owners. Similarly, in a Punjab case, 
where A. entered into a contract wibh B., a brother of 0., on the representa- 
tion of B. that he was C. himself, the Chief Court of the Punjab held that 
the case was one within this section, and that there was no contract between 
A. and B. (a). It may be- a delicate question in a case of this kind, if the 
transaction is between parties face to face, whether A.'s intent is to contract 
with the man then and there present, whatever he calls himself, or to 
contract only with C., the person with whom he thinks he is dealing. 
Some American authorities hold that an agreement with a person " identified 
by sight and hearing " is not absolutely void, though personation may 
render it voidable on the ground of fraud ; but it is submitted as the better 
opinion that, although proof that there was no intention of contracting 
with the personator may be harder in such a case, the question is still a 
question of fact. On the same principle, if a man is induced to apply 
for shares in a company by falsely representing it to be identical with an 
older company of like name, there is no real agreement to take the 
shares (6). 

As to the subject-matter of the agreement. It is quite possible for 
the parties to a contract to be under a common mistake of this kind. If 
the mistake is not common, it may happen, in very exceptional cases, that 
by reason of an ambiguous name, or the like, each party is mistaken as to 
the other's intention, and neither is estopped from showing his own 

(z) (1878) 3 App. Ca. 459, Finch, S. C. not, of course, have been bound to accept 

441. QiKsre, what would have been the them. 

result if by some lucky accident the (a) Jayyannath v. Secretary of State 

goods had been delivered to Blenkiron & (1886) Punj. Rec.no. 21. 

Co. ? It seems they might have treated (b) Saillle's Case [1898] 1 Ch. 110. 
the goods as offered to them. They could 



70 THE INDIAN CONTRACT ACT. 

Ss. 13, 14. intention (c). Otherwise a contract (assuming the other conditions for 
the formation of a contract to be satisfied) can be affected by such a 
mistake, not common to both parties, only where it is induced by fraud or 
misrepresentation. We shall find (see below on s. 18) that wilful 
acquiescence in the other party's mistake is equivalent to misrepresentation 
under certain circumstances. If the mistake is common, it can seldom, if 
ever, be said that there was no consent. A simpler and more correct 
explanation is to say that there was an agreement subject to a condition 
understood or implied in the nature of the agreement itself, though not 
expressed, and that condition has not been fulfilled. It may be that at 
the date of the agreement the condition is already incapable of fulfilment 
by reason of some fact unknown to the parties ; as in the case of an 
agreement for the sale of a horse which in fact is dead, or a specific cargo 
which in fact is> lost. In that case no operative obligation ever arises 
under the agreement. But this may be the case with any conditional 
contract. The interposition of a time of suspense, during which it 
cannot be known whether there will be an operative contract or not, can 
make no difference to the legal nature of the transaction. This particular 
class of cases, however, is specially dealt with by s. 20 of the Act. 

In many cases falling under the foregoing heads, though not in all, the 
same result may be arrived at by observing that there is no consideration 
for the promise which it is sought to enforce. 

Coercion wholly excluding Consent. Coercion might possibly be such 
as not only to prevent consent from being free (ss. 14, 15), but to exclude 
any real or intelligent consent altogether. In two English cases of our own 
time marriages have been declared void, in extremely peculiar circumstances, 
on the ground of combined fraud and coercion having operated on the 
pretended wife to such an extent that the marriage was not her voluntary 
act (d). No case of this kind is known to have occurred in the region of 
ordinary contract. 

14. Consent is said to be free when it is not caused by 
"Free consent" W coercion, as defined in section 15, or 

defined> (2) undue influence, as defined in section 

16, or 
(3) fraud, as defined in section 17, or 

(c) Raffles v. Wichelhaus, note (a), p. 63, sense, and there was no contract, 

above ; Faleh v. Williams [1900] A. C. (d) Scott v. SebrigM (1886) 12 P. D. 21 ; 

176, where an offer made by an ambiguous Ford v. Stier [1896] P. 1, where the 

code message was accepted uncondition- woman thought the ceremony was only a 

ally, but in fact not in the proposer's betrothal. 



UNFREE CONSENT. 71 

(4) misrepresentation, as denned in section 18, or Ss. 14, 15. 

(5) mistake subject to the provisions of sections 20, 21, 

and 22. 

Consent is said to be so caused when it would not have 
been given but for the existence of such coercion, undue 
influence, fraud, misrepresentation or mistake. 

Unfree Consent. Not only consent but free consent is declared by 
s. 10 to be necessary to the complete validity of a contract. The Act now 
proceeds to declare the meaning of this addition. Where there is no consent 
or no real and certain object of consent (cf. s. 29, p. 177, below) there can 
be no contract at all. Where there is consent, but not free consent, there 
is generally a contract voidable at the option of the party whose consent 
was not free. This section declares in general the causes which may 
exclude freedom of consent, leaving them to be more fully explained by the 
later sections referred to in the text. In one respect the language is open 
to objection. It seems, when read together with that of other relevant 
sections, to assume that there are cases in which a contract is voidable on 
the ground of mistake. We are not aware of any such cases. We have 
seen that certain kinds of mistake may exclude consent altogether. In such 
cases no real agreement is ever formed, or there is no real object on which 
the parties are agreed, and the seeming agreement is wholly void. Other- 
wise mistake, if not induced by misrepresentation or fraud, is inoperative. 
If there be any specific exceptions to this rule, the Act gives no clue to 
them; in fact, we do not believe there are any. The specific provisions of 
the Act, however, cover the ground sufficiently to avoid any danger of 
serious error in practice. 

15. "Coercion" is the committing, or threatening to 
coercion " commit, any act forbidden by the Indian Penal 
defined. Code, or the unlawful detaining, or threatening 

to detain, any property, to the prejudice of any person what- 
ever, with the intention of causing any person to enter into 
an agreement. 

Explanation. It is immaterial whether the Indian Penal 
Code is or is not in force in the place where the coercion is 

employed. 

Illustrations. 

A., on board an English ship on the high seas, causes B. to enter 
into an agreement by an act amounting to criminal intimidation 
under the Indian Penal Code. 



72 THE INDIAN CONTRACT ACT. 

S. 15. A. afterwards sues B. for breach of contract at Calcutta. 

A. has employed coercion, although his act is not an offence by 
the law of England, and although s. 506 of the Indian Penal Code 
was not in force at the time when or place where the act was done. 



Extent of " Coercion " under the Act. The words of this section are 
far wider than anything in the English authorities ; it must be assumed 
that this was intended. In the original draft the word " coercion " is used 
but not defined. As the definition stands the coercion invalidating a 
contract need not proceed from a party to the contract, or be immediately 
directed against a person whom it is intended to cause to enter into the 
contract or any member of his household, or affect his property, or be 
specifically to his prejudice. In England the topic of " duress " at common 
law has been almost rendered obsolete, partly by the general improvement 
in manners and morals, and partly by the development of equitable juris- 
diction under the head of Undue Influence. Detaining property is not 
duress. Two singular recent cases of marriage under coercion have been 
cited under s. 13 (p. 70, above). 

Act forbidden by the Penal Code. The words " act forbidden by the 
Indian Penal Code " make it necessary for the Court to decide in a civil 
action, if that branch of the section is relied on, whether the alleged act of 
coercion is such as to amount to an offence. The mere fact that an agree- 
ment to refer matters in dispute to arbitration was entered into during the 
pendency and in fear of criminal proceedings is not sufficient to avoid the 
agreement on the ground of " coercion," though the agreement may be 
void as opposed to public policy within the meaning of B. 23 (e). It must 
further be shown that the complainant or some other person on his behalf 
took advantage of the state of mind of the accused to apply pressure upon 
him to procure his consent (/). So far as we are aware, there is no Indian 
case decided with express reference to the branch of the section now under 
consideration. In Banda All v. Banspat Singh (g), the High Court of 
Allahabad refused to enforce a bond executed by a judgment debtor in 
favour of the decree-holder to procure his release from custody in execution 
of a decree of a Court which had no jurisdiction to entertain the suit. 
The Court held that the bond was obtained when the judgment debtor was 
in duress, and it could be said with some amount of certainty that the 
decision proceeded on the ground (though no reasons are stated) that the 
alleged act of coercion amounted to an offence within the meaning of 

(e) Gobardhan Das v. Jai Kishen Das Merionethshire Building Society [1892] 1 

(1900) 22 All. 224 ; Masjidi v. Mussammat Ch. 1 73. 

Ayisha (1882) Pimj. Rec. no. 135. () (1882) 4 All. 352. 

(/) 22 All. p. 227, citing Jones v. 



ACT FORBIDDEN BY THE PENAL CODE. 73 

the Penal Code (h). The judgment of the High Court, so far as it holds S. 15. 
that the bond was executed under coercion, seems open to question as 
involving the assumption that the arrest of a judgment debtor in execution 
of an apparently regular decree amounts to the offence of wrongful confine- 
ment if the Court is ultimately found to have no jurisdiction. This would 
be a dangerous doctrine to adopt in India, where the majority of suitors 
consist as a rule of illiterate and ignorant persons who cannot be expected 
to understand the respective jurisdictions of the Courts of various grades 
spread over different parts of the country. In the next place, assuming 
that the defendant abetted the offence of wrongful confinement, it does not 
appear that he did it with the intention of causing the plaintiff to execute 
the bond, though the plaintiff may have signed the bond with the object of 
procuring his release from custody. There is yet another case which might 
be considered under the present head. In that case (i) the High Court 
of Madras held that an adoption by a Hindu widow thirteen years old (fc) 
was not binding upon her, it having been found that the relatives of the 
adopted boy obstructed the removal of the corpse of her husband from her 
house until she consented to the adoption. The decision proceeded on the 
ground that the widow's consent to the adoption was not free. The Court 
seems to have thought that the act of the relatives in obstructing the 
removal of the corpse was within the present section as being forbidden by 
the Indian Penal Code, but it does not appear under what section of the 
Code they would have held it punishable. The only section possibly 
applicable to obstructing the removal of a corpse would seem to be s. 297, 
which enacts inter alia that whoever with the intention of wounding the 
feelings of any person, or with the knowledge that the feelings of any 
person are likely to be wounded, offers an indignity to any human corpse, 
or causes disturbance to any persons assembled for the performance of 
funeral ceremonies, is liable to imprisonment or fine or both. On the facts 
of the case there could hardly be any doubt that the act was done with 
intent to wound the widow's feelings, or at any rate with the knowledge 
that her feelings would be wounded. The fact, therefore, would constitute 
an offence if obstructing the removal of the corpse could be regarded as an 
indignity offered to the corpse, or as a disturbance to the persons assembled 
to perform the funeral ceremonies. The act constituting coercion did not 
proceed from any party to the agreement, but the words of the section, as 



(/O See extract from judgment of the 1875 does not affect the capacity of any 

District Judge at p. 354 of the report. person to act in matters of adoption 

(0 Ranyaiuiyaltamma v. Alwar Setti (s. 2). The capacity to adopt is deter- 

(1889) 13 Mad. 214. mined by the personal law to which the 

(7i) The Indian Majority Act IX of party adopting is subject. 



74 THE INDIAN CONTRACT ACT. 

Ss. 15, 16. pointed out above, make this immaterial. In any event there would have 
been no difficulty in holding that the widow's consent was obtained by 
undue influence within the meaning of s. 16 of the Act. 

16, (1) A contract is said to be induced by " undue in- 

" Undue influ- fluence " where the relations subsisting between 

the parties are such that one of the parties is 

in a position to dominate the will of the other and uses 

that position to obtain an unfair advantage over the 

other. 

(2) In particular and without prejudice to the generality 
of the foregoing principle, a person is deemed to be in a 
position to dominate the will of another 

(a) where he holds a real or apparent authority over the 

other, or where he stands in a fiduciary relation 
to the other ; or 

(b) where he makes a contract with a person whose 

mental capacity is temporarily or permanently 
affected by reason of age, illness, or mental or 
bodily distress. 

(3) Where a person who is in a position to dominate 
the will of another, enters into a contract with him, and the 
transaction appears, on the face of it or on the evidence 
adduced, to be unconscionable, the burden of proving that 
such contract was not induced by undue influence shall lie 
upon the person in a position to dominate the will of the 
other. 

Nothing in this sub-section shall affect the provisions 
of section 111 of the Indian Evidence Act, 1872. 

Illustrations. 

(a) A., having advanced money to his son, B., during his minority, 
upon B.'s coming of age obtains, by misuse of parental influence, a 
bond from B. for a greater amount than the sum due in respect of the 
advance. A. employs undue influence. 

(b) A., a man enfeebled by disease or age, is induced, by B.'s 
influence over him as his medical attendant, to agree to pay B. an 



UNDUE INFLUENCE. 75 

unreasonable sum for his professional services. B. employs undue S. 16. 

influence. 

(c) A., being in debt to B., the money-lender of his village, con- 
tracts a fresh loan on terms which appear to be unconscionable. It lies 
on B. to prove that the contract was not induced by undue influence. 

(d) A. applies to a banker for a loan at a time when there is 
stringency in the money market. The banker declines to make the loan 
except at an unusually high rate of interest. A. accepts the loan on 
these terms. This is a transaction in the ordinary course of business, 
and the contract is not induced by undue influence. 



This section was substituted for the original s. 16 by the Indian 
Contract Act Amendment Act VI of 1899, s. 2. 

The section before it was amended stood as follows : 

" ' Undue influence ' is said to be employed in the following cases : 

" (1) When a person in whom confidence is reposed by another, or who 
holds a real or apparent authority over that other, makes use of such 
confidence or authority for the purpose of obtaining an advantage over 
that other which, but for such confidence or authority, he could not have 
obtained ; 

" (2) When a person whose mind is enfeebled by old age, illness, or 
mental or bodily distress, is so treated as to make him consent to that to 
which, but for such treatment, he would not have consented, although such 
treatment may not amount to coercion." 

There were no illustrations appended to the old section. Illustra- 
tions (a) and (b) of the present section are elementary law (I). They were 
intended to be added to the section in its original form, but for some reason 
withdrawn before the Act was passed. Illustrations (c) and (d) are 
evidently intended to explain the application and the limits of par. 3. 

The doctrine of Undue Influence in England. "The equitable 
doctrine of undue influence has grown out of and been developed by 
the necessity of grappling with insidious forms of spiritual tyranny and 
with the infinite varieties of fraud " (m). It applies alike to acts of 
pure bounty by way of gift and to transactions in the form of contract 
which are clearly more advantageous to one party than to the other. 
In combination with other special rules it may even be applied to trans- 
actions which do nob show on the face of them any " unfair advantage." 
The sixteenth section of the Act, as it stood till 1899, did not adequately 

(0 As to the relation between medical impeachable by subsequent confirmation : 

attendant and patient, see Dent v. Bennett Mitchell v. Ilomfray (1881) 8 Q. B. Div. 

(1839) 4 My. & Or. 269, 48 R. R. 94. A 587. 

gift of this kind may of course (like any (/.) Lindley, ~L.J.,inAllcardv. Skinner 

other voidable transactions) become un- (1887) 36 Ch. Div. 145, 183. 



76 THE INDIAN CONTRACT ACT. 

S. 16. represent the generality of the EngliSh doctrine. In fact, however, one 
at least of the Indian High Courts acted boldly and beneficially on the 
general principles of English equity without fettering itself by the precise 
words of the Act. Another defect now remedied was that nothing was 
said in the Contract Act about the important question of burden of 
proof, and magistrates and practitioners were left to discover for themselves 
that tlie real working strength of this section could be understood only by 
reading it with s. Ill of the Evidence Act. 

The English authorities are numerous, and many of them are compli- 
cated by questions on the one hand of actual fraud or on the other hand of 
breach of some special duty, such as that of an agent, which is independent 
of the state of mind of the parties. It will be sufficient for the present 
purpose to refer to a few of the leading authorities on the various points 
dealt with by the text of the Act. The first paragraph of the section lays 
down the principle in general terms ; the second and third define the 
presumptions by which the Court is enabled to apply the principle. It is 
obvious that the same power which can " dominate the will " of a weaker 
party is often also in a position to suppress the evidence which would be 
required to prove moral constraint in a specific instance. Modification of 
the ordinary rules of evidence is accordingly necessary to prevent a failure 
of justice in such cases. Where the special presumptions do not apply, 
proof of undue influence on the particular occasion remains admissible, 
though strong evidence is required to show that, in the absence of any of 
the relations which are generally accompanied by more or less control on 
one side and submission on the other, the consent of a contracting party 
was not free. In the case of a pure voluntary gift (though there is no 
general presumption against the validity of gifts) the proof is less difficult ; 
but this is not within our subject. 

Sub-s. 1 : Undue Influence generally. The first paragraph gives the 
elements of undue influence : a dominant position and the use of it to 
obtain an unfair advantage. The words " unfair advantage " must be 
taken with the context. They do not limit the jurisdiction to cases where 
the transaction would be obviously unfair as between persons dealing on 
an equal footing. " The principle applies to every case where influence is 
acquired and abused, where confidence is reposed and betrayed " (w), or, as 
Sir Samuel Romilly expressed it in his celebrated argument in Huguenin v. 
Baseley, which has been made authoritative by repeated judicial approval (0), 

(n) Lord Kingsdown in Smith v. Kay ence or other defined fiduciary relation. 

(1859) 7 H. L. C. 750, at p. 779. This (o) (1807) 14 Ves. 285 ; 9 R. R. 283 ; 

was a case of general control obtained by 48 R. R. 102; per Wright, J., [1893] 1 

an older man over a younger one during Ch. 752. 
his minority without any spiritual influ- 



UNDUE INFLUENCE. 77 

" to all the variety of relations in which dominion may be exercised by S. 16. 
one person over another." "As no Court has ever attempted to define 
fraud, so no Court has ever attempted to define undue influence, which 
includes one of its many varieties" (p). But the English cases on the 
subject have been said by the same authority to be divisible into two 
groups, according as the charge against the donee (to use this word for 
shortness' sake) was of aggressive circumvention or of abusing the 
opportunities given by a duty. 

" First, there are the cases in which there has been some unfair and 
improper conduct, some coercion from outside, some overreaching, some 
form of cheating, and generally, though not always, some personal advantage 
obtained by a donee placed in some close and confidential relation to the 
donor. . . . 

" The second group consists of cases in which the position of the 
donor to the donee has been such that it has been the duty of the donee 
to advise the donor or even to manage his property for him. ... In this 
class of cases it has been considered necessary to show that the donor had 
independent advice, and was removed from the influence of the donee when 
the gift to him was made " (q). 

Sub-s. 2 : Different forms of influence. The second paragraph of 
the present section makes a division of the subject-matter on a different 
principle, according to the origin of the relation of dependence, continuing 
or transitory, which makes undue influence possible. Such a relation may 
arise (a) from a special authority or confidence committed to the donee, or 
(b) from the feebleness in body or mind of the donor. However, it is 
impossible to find plain and clear-cut categories for transactions which are 
often obscure and complicated, and sometimes purposely made so. Practically 
the most important thing to bear in mind is that persons in authority, or 
holding confidential employments such as that of a spiritual, medical, or 
legal adviser, are called on to act with good faith and more than good faith 
in the matter of accepting any benefit (beyond ordinary professional 
remuneration for professional work done) from those who are under their 
authority or guidance. In fact, their honourable and prudent course is to 
insist on the other party taking independent advice (r). Following these 

(jo) Lindley, L. J., in Allcard v. Skinner following and explaining Rhodes v. Bate 

(1887) 36 Ch. Div. at p. 183. (1865) L. R. 1 Ch. 252, and other earlier 

(?) 36 Ch. Div. at p. 181. authorities; and the Court must also be 

00 In the case of a gift from client to satisfied that the influence has in fact 

solicitor it is an essential condition to the ceased : Wright v. Carter [1903] 1 Ch. 

validity of the gift that the client should 27. It is hardly too much to say that 

have competent independent advice : such a gift, whatever it may be in 

Liles v. Terry [1895] 2 Q. B. 679, C. A., form, is practically revocable. The 



78 THE INDIAN CONTRACT ACT. 

S. 16. principles, the High Court of Allahabad set aside a gift of the whole of his 
property by a Hindu well advanced in years to his guru, or spiritual adviser, 
the only reason for the gift as disclosed by the deed being the donor's desire 
to secure benefits to his soul in the next world (s). Similarly, where a 
cestui que trust had no independent advice, it was held that a gift by him 
to the trustee of certain shares forming part of the trust funds was void, 
though in the same case a gift of shares which did not form part of the 
trust funds was upheld (). The case of Wajid Khan v. Ewaz Ali (ii\ 
in which the Judicial Committee set aside a deed of gift executed by an old 
illiterate Mahomedan lady in favour of her confidential managing agent, 
comes under this head. And so does the case in which the High Court of 
Bengal refused to enforce an agreement executed by a poor woman in 
favour of her mooJchtear by which she bound herself to give him, by way of 
remuneration for his services, one half of the property which she might 
recover by his assistance (). The same principles apply to agreements for 
remuneration between an attorney and a client (y) and between a managing 
clerk in an attorney's office and a client (2). A parent stands in a fiduciary 
relation towards his child, and any transaction between them by which any 
benefit is procured by the parent to himself or to a third party at the 
expense of the child will be viewed with jealousy by courts of equity, and 
the burden will be on the parent or third party claiming the benefit of 
showing that the child in entering into the transaction had independent 
advice, that he thoroughly understood the nature of the transaction, and 
that he was removed from all undue influence when the gift was made. 
Upon these principles the High Court of Madras refused to enforce against 
an adopted son a deed of trust of joint family property executed by him 
and his adoptive father whereby annuities were created in favour of certain 
relations of the father, in a suit brought by them after the father's death 
to recover arrears of annuities. The deed was executed by the son soon 
after he attained majority, and there was no evidence to show that the son 
had independent advice, or that he understood the nature of the 
transaction, or that his father's influence had ceased when the document 

principle of Liles v. Terry was followed s. 53. 

in Rajah Papamma Row v. Sitaramayya (u) (1891) 18 Cal. 545 ; L. R. 18 Ind. 

(1895) 5 Mad. L. J. 234. Ap. 144. 

(#) Mannu Singh, v. TJmadat Pande (x) Pushong v. Munm Halwani (1868) 

(1890) 12 All. 523. 1 B. L. R. A. C. 95. 

(f) Raghunath v. Varjivandas (1906) (y) Brqjendra Nath v. Sreemutty Luclt- 

30 Bom. 578 ; Knight v. Marjoribanks hey Money (1901) 60. W. N. 816. 

(1849) 2 Mac. & G. 10 ; 2 H. & Tw. 308. (z) Hamralabhdas v. Bhai Jivanji 

As to purchase by a trustee from a (1902) 26 Bom. 689. 
beneficiary, see Indian Trusts Act, 1882, 



MENTAL DISTRESS. 79 

was executed (a). But the presumption of undue influence does not apply to S. 16. 
a gift by a mother to her daughter. If such a gift is sought to Be set aside 
on the ground of undue influence, the burden lies upon those who seek to 
avoid it to establish domination on the part of the daughter and subjection 
of the mother (&). Age and capacity are important elements in determining 
whether consent was free in the absence of any confidential relation, but as 
against the presumption arising from the existence of such a relation they 
count for very little (c). Clause (b) of this paragraph seems to include the 
principle, established by a series of English decisions, that "where a 
purchase is made from a poor and ignorant man at a considerable undervalue, 
the vendor having no independent advice, a court of equity wilV set aside 
the transaction " (d). Infirmity of body or mind on the vendor's part will 
make it still more difficult to uphold any such contract. As to the effect 
of inadequacy of consideration see s. 25, expl. 2, p. 148, below. 

Mental distress. " A state of fear by itself does not constitute undue 
influence. Assuming a state of fear amounting to mental distress which 
enfeebles the mind, there must further be action of some kind, the 
employment of pressure or influence by or on behalf of the other party to 
the agreement." The mere fact, therefore, that a submission was executed 
by the defendant during the pendency and under fear of a criminal 
prosecution instituted against him by the plaintiff will not avoid the 
transaction on the ground of " undue influence." It was so held by the 
High Court of Allahabad (e) in a case decided under the old section. The 
decision would, it seems, be the same under the section as it now stands. 
It could not be said in the case above that the plaintiff was in a position to 
dominate the will of the defendant merely by reason of the fact that 
criminal proceedings had been pending against the defendant at the time 
when the submission was executed by him ; nor is there anything to show 
in the facts of the case that the plaintiff used any such position to obtain 
an unfair advantage over the defendant. Both these elements are, 
however, present in the case where the High Court of Madras refused to 
enforce an agreement entered into by a Hindu widow to adopt a boy to her 
husband, it appearing on evidence that the relatives of the boy obstructed 

(a) Laltshmi Doss v. Roop Loll (1907) p. 257. 

30 Mad. 169, in app. from 29 Mad. 1. As (d) Per Kay, J., Fry v. Lane (1888) 4 

to transactions between a guardian and a Ch. D. 312, 322, the latest reported case 

ward, soon after the ward has ceased to of this class. 

be a minor, see Guardian and Wards Act, (e) Gobardhan Das v. Jai Kishcn Das 

1890, s. 20. (1900) 22 All. 22-i. See also Masjidl v. 

(J) Ismail Mussajee v. Hafiz Boo Mussammat Ayisha (1882) Punj, Rec. 

(1906) 33 Gal. 773, L. K. 33 Ind. Ap. 86. no. 135. 

(c-) Rhodes v. Sate, L. E. 1 Ch. at 



80 THE INDIAN CONTRACT ACT. 

S. 16. the removal of her husband's corpse from the house unless she consented to 
the adoption (/). The same elements are also to be found in the case 
where the Allahabad High Court set aside a deed of gift executed by an 
indigent Brahman to a temple of which the defendant had charge, it having 
been found that the gift left the donor without any means, and that the 
defendant had motives of personal gain in procuring it. The gift was 
made while the donor was living in the defendant's house, where he was 
fed and maintained by him, and during the pendency of a suit to recover 
the property prosecuted by the defendant on behalf of the donor at his own 
expense (g). 

In a Madras case where the plaintiff's agreed to relinquish their right 
to a religious office in favour of the defendant in consideration of the latter 
withdrawing a charge of criminal trespass preferred against them, it was 
held that the agreement was voidable, the charge of trespass being false, 
and the sole cause for entering into the agreement being " the well-founded 
terror of the influence of the prosecutor and of the civil death which 
would probably result from his proceedings " (h). Similarly where criminal 
proceedings were threatened against a mooJcadam for misappropriation of 
his master's moneys, and a bond was passed by an ignorant Hindu 
widow who had brought him up as her son to save him from the 
threatened prosecution, it was held that the agreement was not binding 
upon the widow, she having had no independent advice (t). 

Transactions with Parda-nishin women. From a time before, though 
not long before, the passing of the Contract Act, some of the High Courts, 
with a certain amount of support from the Judicial Committee, have treated 
parda-nishin women (sometimes in terms only Hindu women, but if a 
woman is in fact secluded it cannot matter whether she is a Hindu or not) 
as a class of persons specially exposed to undue influence, and have gone 
near to laying it down as a rule of law that every one dealing with a 
parda-nishin woman is bound to show affirmatively that she understood the 
nature of the transaction, and that the terms were fair. The rule was 
stated by the late Sir W. Rattigan, in a paper where he forcibly criticised 
this policy (k), to have been first enounced in 1867 in a Calcutta case 
not regularly reported. " It does not necessarily follow," Sir W. Rattigan 
observed, " that a native woman, simply because she sits behind the parda, 

(/) Ranganayaliamma v. Alwar Settl 566. See also Rangnath v. Gorind (1904 

(1889) 13 Mad. 214. 28 Bom. 639. 

(0) Sital Prasad v. Parbhu Lai (1888) (&) " The Parda Nas/tin [sic~\ Woman 
10 All. 535. and her Protection by British Courts of 

(A) Pudlshary Kri*hneu v. Karampally Justice," Journ. Com p. Legist., December, 
(1874) 7 M. H. C. 378. 1901, pp. 252, 257, 258. 

(1) Kessowji v. Hurjtian (1887) 11 Bom. 



PARDA-NISHIN CASES. 81 

is to be placed in the same category as the ' weak, ignorant, and infirm S. 16. 
persons' whom the Court of Chancery, under a proper interpretation of its 
approved practice, is accustomed to protect. On the contrary, it is common 
experience to find in India parda ladies who are highly intelligent, strong- 
minded, and who possess excellent business capacity, and contrive to manage 
large estates with great success. To adopt a sweeping generalisation, and 
to hold that every parda nashin lady who enters into any commercial 
transaction, or who makes a disposition of her property, is presumably the 
victim of ' undue influence,' is to make an assumption which is contrary 
to actual facts, and to cause the law to be abused for the purpose of avoiding 
bond fide engagements." 

In the earliest Privy Council decision on the subject, where aMahomedan 
lady sued to recover from her husband the value of Company's paper of a 
considerable amount alleged to have been endorsed and handed over to him 
to receive interest thereon, and the defence was that he had purchased the 
paper from his wife, it was held by their Lordships that, though the wife 
failed to prove affirmatively the precise case set up by her in the plaint, the 
burden of proof was upon the husband to show, the plaintiff loeingaparda- 
nishin, that the sale was a. bond fide one for value, and that upon the 
evidence he had failed to satisfy the burden (T). A few years later it was 
declared by the same tribunal that, as regards deeds taken from parda 
women, the Courts have always been careful to see " that the party executing 
them has been a free agent, and duly informed of what she was about " (m). 
It is not sufficient to show that a document executed by a parda-nishin 
woman was read out to her ; it must further be shown that it was explained 
to her or that she understood its conditions and effect (ri). The reason is 
that the ordinary presumption that a person understands the document to 
which he has affixed his name does not apply in the case of a parda-nishin 
woman (0). There is one case which is unfavourable to the theory of 
presumed incapacity, but it may be said either that the burden of proof 

(7) Moonshee Buzloor Ruheem v. 132 ; Sumsuddin v. Abdul (1907) 31 

S/ntmsoonissa Begum (1867) 11 M. I. A. Bom. 165. 
551 . (0) Asligar All v. Delroos Banoo Begum 

00 Geresh Chunder v. Blmggobutiy (1877) 3 Gal. 324 ; Mariam JBibi v. 

(1870) 13 M. I. A. 419, 431 ; Sudisht Lai Sahina (1892) 14 All. 8 ; Acchkan Kuar 

v. Sheolarat Koer (1881) 7 Cal. 245, L. R. v. Thakur Das (1895) 17 All. 125 ; Hoti 

8Ind.Ap.39;JBehariLalv.HabibaBibi Lai v. Musammat (1903) Punj. Eec. 

(1886) 8 All. 267 ; Annoda Mohun Hal v. no. 77. In Ashgar All's case the Judicial 

Bkttban Mohini DcU (1901) 28 Cal. 546, Committee set aside a tauliatnama exe- 

L. R. 28 Ind. Ap. 71. cuted by a Mahomedan lady on the false 

00 Shambati Koeri v. Jago Bibi(l902 representation that the effect of the 

9 Cal. 749 ; Sham Koer v. Dah Koer document was what she desired. The 

(1901) ?9 Cal. 664, L. R. 29 Ind. Ap. case looks very like one of positive fraud. 

i.e. 6 



82 THE INDIAN CONTRACT ACT. 

S. 16. was discharged, or that the charge of undue influence was discredited by 
being made as an afterthought, and not by the lady herself, but by her 
representative (p). But although, where it is sought to enforce a contract 
against o, parda-nishin lady, it is incumbent on the plaintiff to show that 
the contract was entered into by the lady after proper advice and with full 
understanding of its terms and effect, yet, where a parda-nishin lady seeks 
to set aside a contract under which there has been possession and enjoyment, 
the burden of proof lies on her of establishing at least a good primd facie 
title to the relief claimed, though the quantum of evidence in her case 
would not be the same as that required from any other plaintiff seeking to 
avoid his deliberate act (q). 

It appears on a review of the above decisions that most, if not all, of 
them could have been arrived at without the aid of any general presumption, 
on such grounds as that the act was done under the influence of marital 
control, or actual fraud or misrepresentation, or even in total ignorance of 
its nature and effect. The only thing in English law that seems analogous 
to the treatment of a parda-nishin woman's dealings as presumably invalid 
is the treatment of dealings with " expectant heirs " by Courts of Equity, 
where fraud is said to be " presumed from the circumstances and condition 
of the parties contracting." But this equitable doctrine is peculiar, and 
depends, in part at any rate, on peculiar reasons not existing in India (r). 

Who is a Parda-Nishin. The expression " parda-nishin " connotes 
complete seclusion. It is not enough to entitle a woman to the special 
care with which the Courts regard the disposition of a parda-nishin 
woman that she lives in some degree of seclusion (s). Thus a woman 
who goes to Court and gives evidence, who fixes rents with tenants 
and collects rents, who communicates, when necessary, in matters of 
business, with men other than members of her own family, could not be 
regarded as a parda-nishin woman (/). In Hodges v. The Delhi and 
London Bank, Limited (u), a Privy Council case, it was said : " It is 
abundantly clear that Mrs. Hodges was not a parda-nishin. The term 
quasi-parda-nishin seems to have been invented for this occasion. Their 
Lordships take it to mean a woman who, not being of the parda-nishin 
class, is yet so close to them in kinship and habits, and so secluded from 

(p) Mahomed BulisJi v. Hosseini JBibi () Shaih Ismail v. Amirbibi (1902) 

(1888) 15 Cal. 684, L. R. 15 Ind. Ap. 81. 4 Bom. L. R. 146, 148. 

(j) Naushanl Begam v. Intizar Begam (f) Ismail Mussajee v.ffajiz Boo (1906) 

(1899) All. W. N. 25. 53 Cal. 773, 783, L. R. 33 Ind. Ap. ; Shaik 

(r) See Pollock, Principles of Contract, Ismail v. Amirbibi (1902) 4 Bom. L. R. 

ed. 7, 622 sqq. O'Rorke v. Bolingbroke, 146. 

(1877) 2 App. Ca. 814, marks the limit of () (1901) 23 All. 137, 145, L. R. 27 

its application. Ind. Ap. 168. 



UNCONSCIONABLE BARGAINS. 83 

ordinary social intercourse, that a like amount of incapacity for business S. 16. 
must be ascribed to her, and the same amount of protection which the law 
gives to parda-nisTiins must be extended to her. The contention is a novel 
one, and their Lordships are not favourably impressed by it. As to a 
certain well-known and easily ascertained class of women, well-known rules 
of law are established, with the wisdom of which we are not now concerned ; 
outside that class it must depend in each case on the character and position 
of the individual woman whether those who deal with her are or are not 
bound to take special precautions that her action shall be intelligent and 
voluntary, and to prove that it was so in case of dispute." 

Sub-s. 3 : Rule of Evidence. The third paragraph of the present 
section does not lay down any rule of law, but throws the burden of proving 
freedom of consent on a party who, being in a dominant position, makes a 
bargain so much to his own advantage that, in the language of some of the 
English authorities, it " shocks the conscience." Money-lending cases are 
those chiefly contemplated (see illustration (c) ). In fact, the language of 
the section as amended only declares what the High Courts, with or without 
literal authority, but acting in the spirit of the English equitable doctrine, 
have been doing for many years. It must not be supposed, however, that 
there may not be other forms of unconscionable bargain within the mischief 
and the remedy of this enactment. 

" Unconscionable bargains." Illustration (c) contemplates the case 
of a person already indebted to a money-lender contracting a fresh loan 
with him on terms on the face of them unconscionable. In such a case a 
presumption is raised that the borrower's consent was not free. The pre- 
sumption is rebuttable, but the burden of proof is on the party who has 
sought to make an exorbitant profit of the other's distress. The question 
is not of fraud, but of the unconscientious use of superior power. Inadequacy 
of consideration, though it will not of itself avoid a contract (s. 25, expl. 2, 
below), has great weight in this class of cases as evidence that the contract 
was not freely made. As observed in a recent Bombay case, " inadequacy 
of consideration in conjunction with the circumstances of indebtedness and 
ignorance were facts from which it would have been as permissible before 
the amendment of [this section] to infer the use of undue influence as it 
would be since that amendment " (x). Relief in cases of unconscionable 
bargains is an old head of English equity. It was formerly associated in 
a special manner with sales of reversionary interests, which the Court 
was eager to restrain ; and for some time it was the doctrine of the 
Court that a sale of any reversionary interest, if proved to have been 
made for only a little under the value, must be set aside without further 

O) Bliimbhat v. Yeshwantrao (1901) 25 Bom. 126, 128. 

62 



84 THE INDIAN CONTRACT ACT. 

S. 16. inquiry. This rule was at last found so inconvenient that it was abolished 
by statute. But the general principles of equity in dealing with what are 
called " catching bargains" remain, and the third clause of the section now 
before us is apparently intended to embody them. In fact, the Indian 
High Courts had acted on these principles, both before and since the 
passing of the Contract Act, without any express letter of written law to 
justify them in so doing. Thus where the interest was exorbitant, relief 
was granted by reducing the rate of interest in cases where the loan was 
made to an illiterate peasant (y), and to a Hindu sixteen years old (z) (but 
not a minor according to the Hindu law). And where an heir to an estate 
borrowed Rs. 3,700 to enable him to prosecute his claim at a time when he 
was without even the means of subsistence, and gave the lender a bond for 
Rs. 25,000 to be paid after receiving possession of the property, the Court 
held that the bargain was hard and unconscionable, and gave the lender a 
decree for Rs. 3,700, with interest at 20 per cent, per annum (a). Acting 
upon the same principles, the High Court of Bombay has held that a 
covenant in a mortgage executed by illiterate peasants in favour of a money- 
lender to sell the mortgaged property to the mortgagee at a gross under- 
value in default of payment of interest was inequitable and oppressive, and 
the mortgage was set aside to that extent (V). The doctrine above 
enunciated was applied in a recent case decided since the amendment of the 
present section, where the High Court of Allahabad disallowed compound 
interest payable at 2 per cent, per mensem with monthly rests in the case 
of a bond executed by a spendthrift and a drunkard eighteen years old (c). 
And where a person twenty-eight years old, the son of a wealthy father, but 
of profligate habits and greatly in need of money, his father having refused 
to provide him with any money, executed a bond to secure a sum of 
Rs. 500 with interest at the rate of Rs. 37-8 per cent, per annum with six- 
monthly rests, with a stipulation that the borrower should not be empowered 
to pay the money within three years, and if he did pay within three years, 
he should nevertheless be obliged to pay three years' interest at the rate 

(y) Lalli v. Ram Prasad (1886) 9 All. (a) Chunni Ruar v. Rvp Singh (1888) 

74. See also the observations of the 11 All. 57, confirmed on appeal sub nom. 

Judicial Committee in Kamini v. Kali- Raja Mohkam Singh v. Raja Rup Singh 

prossunno Ghose (1885) 12 Cal. 225, 238, (1893) 15 All. 352, 20 Ind. Ap. 127. See 

239, L. R. 12 Ind. Ap. 215, where the loan also Husaln Bakhsh v. Rahmat Husain 

was made to a parda-nishin lady. (1888) 11 All. 128. 

(z) Mothoormohun Roy v. Soorendro (i) Kedari Bin Ranu v. AtmarambJtat 

Aarain Deb (1875) 1 Cal. 108. The (1866) 3 B. H. C. A. C. 11. 

Indian Majority Act, which fixes the age (c) Kirpa Ram v. Sami-ud-din (1903) 

of majority at sixteen, was not passed till 25 All. 284. 
1879. 



UNCONSCIONABLE BARGAINS. 85 

above mentioned, the same Court held that the bargain was unconscionable, S. 16. 
and gave the lender a decree for Rs. 500 with simple interest at the rate 
of 24 per cent, per annum (d). Similarly, where a talukdar, who had been 
declared a "disqualified proprietor" under the provisions of the Oudh 
Land Revenue Act, 1876, and whose property was placed in the charge of 
the Court of Wards on the ground of his indebtedness and consequent 
inability to manage it, executed a bond for Rs. 10,000, repayable with 
interest at 18 per cent, per annum and compound interest in default of 
payment of instalments, the Judicial Committee disallowed compound 
interest on the ground that the position of the parties was such that 
the lender was " in a position to dominate the will " of the borrower, 
and that the charging of compound interest in the circumstances of the 
case was "unconscionable " (e). The relief, however, has not been confined 
to money-lending transactions, and so far back as the year 1874 the 
Judicial Committee set aside a bond obtained by a powerful and wealthy 
banker from a young zamindar who had just attained his majority, and 
had no independent advice, by threats of prolonging litigation commenced 
against him by other persons with the funds and assistance of the banker (/). 
Three years later the same tribunal set aside an ikrarnama executed by a 
minor and another who had just come of age of half of their property in 
favour of the defendants, who had no title to the property, and who had 
taken possession thereof by show of force and with the assistance of a large 
body of retainers (g). Similarly, where the plaintiff, an illiterate agricul- 
turist heavily indebted to the defendant, who was a money-lender, passed a 
sale-deed to the defendant of his lands worth thrice the amount of the debt 
under pressure of payment, the High Court of Bombay ordered by its 
decree that the sale should be set aside on the plaintiff paying to the defen- 
dant the debt owed by him within a fixed period (K). But the question 
whether a transaction should be set aside as being inequitable depends upon 
the circumstances existing at the time of the transaction, and not on 
subsequent events (z). 

As between parties on an equal footing high interest, and even the 
holding of securities for a greater sum than has been actually advanced, will 
not suffice to make the Court hold a bargain unconscionable. Where both 



(<f) Balhishan Das v. Madan Lai (</) Prem Narain Singh v. Parasram 

(1907) 29 All. 303. Singh (1877) 4 Ind. Ap. 101. 

(e) Dhanipal Das v. Manesliar Bakhsh (Ji) Bhimbhat v. Yeshwantrao (1901) 

Singh (1906) 28 All. 570, L. R. 33 Ind. Ap. 25 Bom. 126. 

(/.) Ganga Baltsh v. Jagat Bahadur 

(/) CJiedamlara Ch-etty v. Renja Singh (1895) 23 Cal. 15, L. R. 22 Ind. Ap. 

Krishna Mnthu (1874) 13 B. L. R. 509. 153. 



86 THE INDIAN CONTRACT ACT. 

S. 16. the parties to a mortgage were money-lenders, and the mortgage purported to 
be a security for Rs. 5,000 as principal and Us. 1,250 sawai in lieu of 
interest repayable by seventy-two instalments, it was held that, though the 
interest on an instalment in arrear was to run at 24 per cent, per annum, 
and though the mortgagee retained Rs. 100 on account of khwhadi (bonus) 
out of the Rs. 5,000 purporting to have been advanced to the mortgagor, 
the transaction was not unconscionable, regard being had to the fact that it 
was the practice of the mortgagor himself to make advances on similar 
terms (&) 

On examining the cases relating to money-lending transactions cited 
in the preceding paragraph, it will be observed that in each of them the 
lender was "in a position to dominate the will" of the borrower, and the 
bargain was " unconscionable " within the meaning of cl. (3) of the 
present section. It is only the concurrence of these two elements that can 
justify the Court in granting relief to the borrower. The mere fact that 
the rate of interest is exorbitant is no ground for relief, unless it be shown 
that the lender was in a position to dominate the will of the borrower. 
And it has recently been held by the highest tribunal that urgent need of 
money on the part of the borrower does not of itself place the lender in a 
position to dominate his will within the meaning of this section (I). In 
fact, even before the decision of the Privy Council, the Courts of India 
consistently declined to interfere except in two cases which must now be 
taken as overruled (m), where relief was claimed against an exorbitant rate 
of interest on the ground that the borrower was in urgent need of money. 
" If people with their eyes open choose wilfully and knowingly to enter into 
unconscionable bargains, the law has no right to protect them (n)." 



(K) Harl La/iu Patil v. Ramji Valad any, for which the case was reported 

Pandu (1904) 28 Bom. 371. must have been as here assumed ; but, as 

(I) Sundar Koer v. Rai Sham Krishen only the judgment is given, it is impossible 

(1907) 34 Cal. 150, L. R. 34 Ind. Ap. 9 ; to say whether on the facts the decision 

Ganesh v. Vishnu (1907) 32 Bom. 37 ; was or was not justified. 

Umesk Chandra v. Golap Lai (1903) 31 (;><) Mad/to Singh v. Kashi Ram (1887) 

Cal. 233 ; Chairing v. Whitchurch (1907) 9 All. 228 and Poma Dongra v. William 

32 Bom. 208. The decisions to the Glllespie (1907) 31 Bom. 348. 

contrary in Madho Singh v. Kashi Rum () Mackintosh v. Wingrove (1879) 4 

(1887) 9 All. 228 and Poma Dongra v. Cal. 137 ; Satish Chunder v. Hem Chunder 

William Gillespie (1907)31 Bom. 348 can (1902) 29 Cal. 823; Umesh Chandra v. 

no longer be regarded as good law. The Golap Lai (1903) 31 Cal. 233 ; Kirti 

decision in Madho SingWs case was ex- Chunder v. Atkinson (1905) 10 C. W. N. 

pressly dissented from by the High Court 640; Tarachand v. Girdhari Lai (1889) 

of Calcutta in Umesh Ch a ndra's case. In All. W. N. 167 ; Hem Raj v. Khuda 

Poma Dongra's case the point of law, if liahhsh (1905) Punj. Rec. no. 13. 



UNDUE INFLUENCE : ACQUIESCENCE. 87 

It may be observed, before leaving this subject, that the Courts of S. 16, 
British India ought to decide cases under this section according to its 
terms, and to resort to English decisions only so far as they illustrate its 
provisions. This warning was given by the Judicial Committee in 
Dhanipal Das v. Maneshar BaTchsh Singh (0), where their Lordships said: 
" The Subordinate Judge was wrong in deciding the case in accordance 
with what he supposed to be English equitable doctrine. He ought to have 
considered the terms of the amended section 16 only. He also mistook the 
English law. Apart from a recent statute, an English Court of Equity 
could not give relief from a transaction or contract merely on the ground 
that it was a hard bargain, except perhaps where the extortion is so great 
as to be of itself evidence of fraud. ... In other cases there must be some 
other equity arising from the position of the parties or the particular 
circumstances of the case." 

Lapse of time and limitation. Delay and acquiescence do not bar a 
party's right to equitable relief on the ground of undue influence, unless he 
knew that he had the right, or, being a free agent at the time, deliberately 
determined not to inquire what his rights were or to act upon them (p)^ 
Lapse of time is not a bar in itself to such a relief. There must be conduct 
amounting to confirmation or ratification of the transaction (q). If there 
be no such conduct, it is open to the party, though he may not sue to 
set aside the transaction within the period of limitation, to plead undue 
influence as a defendant in a suit brought against him to enforce the 
transaction. As observed by Sir Lawrence Jenkins, C. J., " A defendant in 
a suit is entitled to resist a claim made against him by pleading fraud [or 
undue influence] , and he is entitled to urge that plea though he may not 
have himself brought a suit to set aside the transaction, and is not, in 
circumstances like the present, precluded from urging that plea by the 
[law of limitation] " (r). This statement of the law was adopted in a recent 
Madras case where it was said : " We do not think it follows that because a 
party's remedy as plaintiff to have an instrument avoided is time-barred, 
his right to say by way of equitable defence, if sued, that the instrument 



00 (1906) 28 All. 570, L. R. 33 Ind. Ap. his position to demand more onerous 

118. The relief granted below was sub- terms than were reasonable." 

stantially confirmed on the ground that (p) Lakshmi Doss v. Hoop Loll (1907) 

the facts brought the case within the 30 Mad. 169. 

section. The borrower "was under a (#) Allcard v. Skinner (1887) 36 Ch. 

peculiar disability and placed in a posi- Div. 145, at pp. 181, 182, 186 ; Wright v. 

tion of helplessness by the fact of his VanderplanTt (1856) 8 D. M. & G. 133. 

estate being under the control of the (?) Rangnatk SaUaram v. Gorind 

Court of Wards," and " the lender used Naraslnv (1904) 28 Bom. 639. 



88 THE INDIAN CONTRACT ACT. 

Ss. 16, 17. ought not to be enforced is equally time-barred " (s). This is in entire 
accordance with the authorities familiar in English equity practice, to 
which it is needless to make further reference. 

17. Fraud " means and includes any of the following 
acts committed by a party to a contract, or 

"Fraud "defined. . J 

with his connivance, or by his agent, with 
intent to deceive another party thereto or his agent, or to 
induce him to enter into the contract : 

(1) the suggestion, as to a fact, of that which is not 

true by one who does not believe it to be true ; 

(2) the active concealment of a fact by one having 

knowledge or belief of the fact ; 

(3) a promise made without any intention of performing 

it; 

(4) any other act fitted to deceive ; 

(5) any such act or omission as the law specially declares 

to be fraudulent. 

Explanation. Mere silence as to facts likely to affect the 
willingness of a person to enter into a contract is not fraud, 
unless the circumstances of the case are such that, regard 
being had to them, it is the duty of the person keeping 
silence to speak, or unless his silence is, in itself, equivalent 
to speech. 

Illustrations. 

(a) A. sells, by auction, to B., a horse which A. knows to be unsound. 
A, says nothing to B. about the horse's unsoundness. This is not fraud 
in A. 

(b) B. is A.'s daughter and has just come of age. Here, the relation 
between the parties would make it A.'s duty to tell B. if the horse is unsound. 

(c) B. says to A. "If you do not deny it, I shall assume that the 
horse is sound." A. says nothing. Here A.'s silence is equivalent to speech. 

(d) A. and B., being traders, enter upon a contract. A. has private 
information of a change in prices which would affect B.'s willingness to 
proceed with the contract. A. is not bound to inform B. 



Fraud in general. Fraud is committed wherever one man causes 
another to act on a false belief by a representation which he does not 

0) LaksJimi Doss v. Roop Loll (1907) 30 Mad. 169, 178. 



FRAUD. 



89 



himself believe to be true. He need not have definite knowledge or belief 
that it is not true (t). When fraud produces damage it is generally a 
wrong entitling the person defrauded to bring a civil action. Under the 
Contract Act we are concerned with the effects of fraud only so far as 
consent to a contract is procured by it. We have already pointed out that 
the result of fraudulent practice may sometimes be a complete misunder- 
standing on the part of the person deceived as to the nature of the 
transaction undertaken, or the person of the other party. Such cases are 
exceptional. Where they occur, there is not a contract voidable on the 
ground of fraud, but the apparent agreement is wholly void for want of 
consent, and the party misled may treat it as a nullity even as against 
innocent third persons. But the fraudulent party is of course estopped 
from denying that there is a contract if the party deceived finds it to be 
his interest to affirm the transaction, which is a conceivable though not 
probable case. In the same way the party deceived must be at liberty 
to treat the transaction as a voidable contract if he thinks fit. No doubt 
many transactions have in fact been so treated notwithstanding that under 
the law as settled in Gundy v. Lindsay (u) they might have been declared 
wholly void. 

Sub-s. 3. The language of the Act throws no light on the relation 
of fraud to misrepresentation. It might even be said to obscure it. That 
relation, however, may be very simply stated. Fraud, as a cause for the 
rescission of contracts, is generally reducible to fraudulent misrepresenta- 
tion. Accordingly we say that misrepresentation is either fraudulent or 
not fraudulent. If fraudulent, it is always a cause for rescinding a 
contract induced by it ; if not, it is a cause of rescission only under certain 
conditions, which the definitions of s. 18 are intended to express. There 
are, however, forms of fraud which do not at first sight appear to include 
any misrepresentation of fact, and sub-ss. 3, 4, and 5 are intended to 
cover these. With regard to a promise made without any intention of 
performing it (sub-s. 3), it is not very difficult to say that a promise, 
though it is not merely a representation of the promisor's intention to 
perform it, includes a representation to that effect. Some promises are 
given more readily and willingly than others ; but we accept promises only 
because we believe them to be made in good faith, and no one would be 
content with a promise which he believed the promisor to have no inten- 
tion of keeping. Similarly it is fraud to obtain property, or the use 
of it, under a contract by professing an intention to use it for some 
lawful purpose when the real intention is to use it for an unlawful 

(0 This is well settled in England : 93 11. R. 732. 
Evam v. Edmonds (1853) 13 C. B. 777 (u) Note (z), p. 69, above. 



S. 17. 



90 THE INDIAN CONTRACT ACT. 

S. 17, purpose (x). Our modern authorities have removed the difficulty which used 
to be felt in treating the statement of a man's intention as a representation 
of fact. " There must be a misstatement of an existing fact, but the state of a 
man's mind is as much a fact as the state of his digestion. It is true that 
it is very difficult to prove what the state of a man's mind at a particular 
time is, but if it can be ascertained it is as much a fact as anything else." 
Accordingly it is fraud to obtain a loan of money by misrepresenting the 
purposes for which the money is wanted, even if there is nothing unlawful 
in the subject for which the money is actually wanted and used (y). In 
particular, it is well settled in England that buying goods with the 
intention of not paying the price is a fraud which entitles the seller to 
rescind the contract (z). On the whole, then, sub-s. 3 of the present 
section did not introduce any novelty (a). 

Sub-s. 4. The mention of "any other act fitted to deceive" in 
sub-s. 4 appears to be inserted merely for the sake of abundant caution. 

Acts and omissions specially declared to be fraudulent. Sub-s. 5 
applies to cases in which the disclosure of certain kinds of facts is expressly 
required by law, and non-compliance with the law is expressly declared to 
be fraud. Thus by s. 55 of the Transfer of Property Act (IV of 1882) 
the seller of immovable property is required to disclose to the buyer " any 
material defect in the property of which the seller is, and the buyer is not, 
aware, and which the buyer could not with ordinary care discover," and 
the buyer to disclose to the seller " any fact as to the nature or extent of 
the seller's interest in the property of which the buyer is aware, but of 
which he has reason to believe that the seller is not aware, and which 
materially increases the value of such interest," and "omission to make 
such disclosures ... is fraudulent," and this, it seems, even if the 
omission be due merely to oversight. In England a similar duty of 
disclosure exists, and failure to fulfil it is a misrepresentation creating a 
right to rescind the contract; but, if not shown to be wilful, the omission 
would not be called fraudulent. Various dealings with property are made 
voidable as being fraudulent, or declared to be fraudulent as against the 
transferor's creditors or assignees, by other enactments. But, as these 
transfers of property cannot well be employed as inducements to any other 
party to enter into any contract beyond such agreement as is involved in 

(x) See Feret v. Hill (1854) 15 C. B. (z) Clowgh v. L. Sf N. W.R. Co. (1871) 

207, which, admitting this, decided that L. R. 7 Ex. 21, in Ex. Ch. ; Ex parte 

the defrauded party, having given posses- Whittaker (1875) L. R. 10 Ch. at p. 449. 

sion, is not entitled to resume it by force (a) Borrowing money with no inten- 

without process of law. tion of repaying it is cheating under the 

(y) Edgington v. Fitzmaurice (1885) Penal Code : s. 416, illustration (f). 
29 Ch. Div. 459, 480, 483, per Bowen, L. J. 



NON-DISCLOSURE. 91 

the fraudulent transfer itself, they do not come within the scope of the Ss. 17, 18. 
Contract Act, and we have no occasion to dwell upon them here (b). 

Mere non-disclosure. There are special duties of disclosure (of 
which we have just seen an instance) in particular classes of contracts, but 
there is no general duty to disclose facts which are or might be equally 
within the means of knowledge of both parties. Silence as to such facts, 
as the Explanation to the present section lays down, is not fraudulent. 
There is a well-known American case on this point arising out of the 
conclusion of peace between Great Britain and the United States after 
the war commonly known as the war of 1812. The contract was for the 
sale of tobacco : the buyer knew, but the seller did not, that peace had 
been made ; and on the seller asking if there was any news affecting the 
market price, the buyer gave no answer. The Supreme Court of the 
United States held that there was nothing fraudulent in his silence (c). 
But there are at least two practical qualifications of this rule. First, the 
suppression of part of the known facts may make the statement of the 
rest, though literally true so far as it goes, as misleading as an actual 
falsehood. In such a case the statement is really false in substance, and 
the wilful suppression which makes it so is fraudulent (d). Secondly, a 
duty to disclose particular defects in goods sold, or the like, may be 
imposed by trade usage. In such a case omission to mention a defect of 
that kind is equivalent to express assertion that it does not exist (<?). The 
illustrations will now be easily understood. We are not aware of any 
English authorities corresponding to (b) and (c). 

18. " Misrepresentation " means and includes 
" Misrepresenta- (1) ^ ne positive assertion, in a manner 

tion" defined. not warranted by the information 

of the person making it, of that which is not true, 
though he believes it to be true ; 
(2) any breach of duty which, without an intent to 
deceive, gains an advantage to the person com- 
mitting it, or any one claiming under him, by 
misleading another to his prejudice, or to the 
prejudice of any one claiming under him ; 

(//) See Transfer of Property Act, s. 53 (c) Laidlaua v. Organ (1817) 2 Wheat, 

(transfers in fraud of other transferees or 178. 

of creditors) ; Indian Insolvent Debtors (d) Peek v. Gurnet/ (1873) L. R. 6 

Act (11 & 12 Viet. c. 21, fss. 9, 24) ; H. L. 392, 403. 

Manmoliandas v. Macleod (1902) 26 (e) Jones v. Sowdcn (1813) 4 Taunt. 

Bom. 765. 847, 14 R. R. 683, 



92 THE INDIAN CONTRACT ACT. 

S. 18. (3) causing, however innocently, a party to an agree- 

ment to make a mistake as to the substance of the 
thing which is the subject of the agreement. 

Language of the Section. This is one of the sections taken wholly 
or in part from the draft Civil Code of New York, and it is one of the 
least satisfactory in point of form. In sub-s. 1 the use of the word 
" warranted " in a sense (whatever that sense may precisely be) unknown 
to the law. and in a subject-matter where the words " warranty " and 
" condition " have already caused quite enough trouble, is an elementary 
fault. Nor is the intention of the qualifying clause, to which we shall 
return, altogether clear. However, the Contract Act has at least made 
some improvement on the classification of the New York draft, where the 
original of this clause stands under the head of Fraud. Sub-s. 2 is obscure 
and apparently useless. Sub-s. 3 (which does not occur in the New York 
draft Code) seems to involve confusion between contracts voidable because 
consent was obtained by misrepresentation and transactions which can 
have no legal effect, except possibly by way of estoppel, because there was 
no real consent at all. 

Principles of English law as to Misrepresentation. The Common 
Law recognises a general duty not to make statements which are in fact 
untrue, with the intent that a person to whom they are made shall act 
upon them, to the damage of a person so acting, and without any belief 
that they are true. The breach of this duty is the civil wrong known as 
fraud or deceit. But, if belief is there, it is not required by any general 
rule of law to be founded on any reasonable ground, though want of any 
reasonable ground may be evidence of want of belief (/). Nor is there 
any universal duty to give correct information, except so far as a partial 
statement of the truth may be rendered substantially false by omission of 
known facts (p. 91, above), or to give any information at all. With 
regard to contracts, the general principle is that if one party has induced 
the other to enter into a contract by misrepresenting, though innocently, 
any material fact specially within his own knowledge, the party misled can 
avoid the contract. We do not know of any positive authority for extending 
such a rule, even in equity, to matters of fact equally within the means of 
knowledge of both parties ; but reliance on the other party's statement in 
such matters is not common or easily proved, and it is certainly convenient 
to state the law in the broad form that "a false representation by one 

(/) Derry v. Peek (1889) 14 App. Ca. clear that the common law is generally so 
337. Such is the law settled for England understood in other jurisdictions, 
by the House of Lords. It is by no means 



MISREPRESENTATION. 93 

party in regard to a material fact made for the purpose of inducing the S. 18. 

other party to enter into a contract, and actually inducing the latter to 

enter into the contract, renders the contract voidable " (g). If this can be 

accepted as the rule of the modern Common Law, the Contract Act does 

not go beyond it, if indeed it goes so far. The qualifying words of the 

Act will be considered below. In certain classes of contracts, where the 

facts are specially within one party's knowledge, a positive duty of disclosure 

is added, and the contract is made voidable by mere passive failure to 

communicate a material fact. The principal examples of this special duty 

are to be found in the several branches of the contract of insurance, and 

in sales of immovable property (cp. p. 90, above). But there is no positive 

duty of disclosure between contracting parties where the facts are not by 

their nature more accessible to one than to the other, though one party 

may have acquired information which he knows that the other has not (7i). 

The rule was laid down by Chief Justice Marshall in the Supreme Court 

of the United States in 1817 in a case where the buyer of tobacco knew, 

but the seller did not, that peace had been concluded between the United 

States and Great Britain "The question in this case is whether the 

intelligence of extrinsic circumstances which might influence the price of 

the commodity, and which was exclusively within the knowledge of the 

vendee, ought to have been communicated by him to the vendor. The 

Court is of opinion that he was not bound to communicate it. It would 

be difficult to circumscribe the contrary doctrine within proper limits 

where the means of intelligence are equally accessible to both parties. 

But at the same time each party must take care not to say or do anything 

tending to impose upon the other " (i). 

In the same way parties are not bound to remove mistakes to which 
they have not contributed (&). It must be remembered that the parties 
can always decide beforehand for themselves, if they choose, what facts 
shall be deemed material and to what extent. On the one hand, they 
can make the existence of any specified state of facts, or the truth of any 
affirmation, an essential term or condition of the contract, so that without 
it there is no contract at all (Z) ; on the other hand, they can make any 

67) Harriman, s. 426 ; cj>. Anson, 168 (7*) Smith v. Hughes (1871) L. R. 6 

sqq. I cannot precisely agree with Sir Q. B. 597. 

W. Anson's historical view of the rules of (Z) Bchn v. Bitrness (1863) 3 B. & S. 

equity in England, but this is not material 751 (ship described in charter-party as 

in India. "now in the port of Amsterdam"); 

(/<) For a recent example see Turner v. Bannerman v. White (1861) 10 C. B. N. S. 

Green [1895] 2 Ch. 205. 844 (hops bought on terms of being free 

(0 Laidlaw v. Organ, 2 Wheat, at from treatment with sulphur), 
p. 195. 



94 THE INDIAN CONTRACT ACT. 

S. 18. fact or affirmation the subject-matter of a warranty or collateral agree- 
ment, so that failure to make it good shall not avoid the principal 
contract, but only give a right to damages. This is exemplified by the 
ordinary warranties, express or implied, on a sale of specific chattels (m). 
In every case the question is what the parties really intended. Much 
perplexity would have been avoided if this principle, explicitly recognised 
only in the second half of the nineteenth century (w), had been understood 
earlier. 

Sub-s. 1. What is meant by "the positive assertion, in a manner 
not warranted by the information of the person making it, of that which 
is not true " ? Many persons would say that, in any ordinary use of the 
English language, the assertion "of that which is not true, though it may 
be innocent and even free from negligence, cannot be " warranted " in any 
manner. Now the framers of the New York Civil Code put this clause 
under the head of Fraud. Probably what they meant was that a mis- 
representation made with reasonable and probable cause for believing it 
true should in no case be treated as fraud, but that a reckless or grossly 
negligent misrepresentation should be. The result would be to lay down 
a more stringent rule as to fraud than is sanctioned by English decisions 
in fact, some such rule as the Court of Appeal laid down in England 
but the House of Lords refused to adopt, in Derry v. Peek (0). 
When this clause is transferred to the head of Misrepresentation, 
it would seem to mean that innocent misrepresentation does not 
give cause for avoiding a contract unless the representation is made 
without any reasonable ground. The High Court of Calcutta, in 
a case not officially reported, has held that an assertion cannot be 
said to be "warranted" for the present purpose where it is based 
upon mere hearsay. Thus if A. makes a positive statement to B. 
that C. would be a director of a company about to be formed, and 
B. applies for shares on the faith of that statement, the statement 
would be a misrepresentation if A. did not derive the information from C. 
direct, but from a third party, D. (p). In the course of the judgment 
Maclean, C. J., said : " I need scarcely say that we must deal with this 
case according to the law of India and not of England, and if we find the 
term ' misrepresentation ' defined by statute in this country, we must do 
our best to ascertain whether the case is brought within that statutory 
definition . . . [A.] says that [D.] told him that he [D.] had authority 

(/) See the sections on Warranty (o) 14 App. Ca. 337, reversing judg- 

(109118) in the chapter on the Sale of ment of C. A., 37 Ch. Div. 541. 

Goods, below. (p) Mohun Lall v. Sri Gungqji Cotton 

() See note (I) on p. 93. Mills Co. (1899) 4 C. W. N. 369, 



MISREPRESENTATION. 95 



from [C.] to use his name in the prospectus as a director, in other words, S. 18. 
that he [A.] obtained his information not from [0.] direct, but only 
through [D.]. I am not disposed to think that if [A.] had relied on the 
second-hand information he derived from [D.], he was 'warranted' in 
making the positive assertion that [C.] would be a director " (</). This 
appears to require, on the part of the person making the representation, a 
belief not merely having some reasonable ground for it is often quite 
reasonable to act upon second-hand information, even when it is not 
unavoidable but founded on the best information that is available. There 
is no reason to be dissatisfied with this judgment, though it may be matter 
of historical doubt whether the framers of the Act intended to go so far. 
The qualification does not, of course, apply to the classes of contracts 
where there is a special duty to disclose all material facts within a party's 
knowledge. Outside these contracts of " abundant good faith " the rule 
of the High Court of Calcutta sets up a standard of diligence which may 
well be thought adequate ; though it would not satisfy those learned 
writers in England and America who take the view that " innocent mis- 
representation which brings about a contract is now a ground for setting 
the contract aside " (r) in all cases. 

We may refer to a Punjab case to illustrate the meaning of the expres- 
sion "positive assertion." A. sells a mare to B. Before the sale A. writes 
to B. as follows, in answer to inquiries from B. : "I think your queries 
would be satisfactorily answered by a friend if you have one in the station, 
and I shall feel more satisfied. All I can say is that the mare is thoroughly 
sound." The letter is a " positive assertion " of soundness coupled with 
a recommendation to B. to satisfy himself before purchasing ; but it does 
not amount to a warranty (s). 

Sub-s. 2. This sub-section is, as already stated, obscure (). It was 
considered in a Bombay case (it) by Sargent, J. : " The second clause of 
s. 18 is probably intended to meet all those cases which are called in the 
Courts of Equity, perhaps unfortunately so, cases of ' constructive fraud ' (v), 
in which there is no intention to deceive, but where the circumstances are 

(#) Ibid., p. 388. principle that an agent who is bound to 

(?) Anson, 172 ; Harriman, cited p. 93, be skilled shall not profit by his own 

above. incompetence. 

(*) Currie v. Renniclt (1886) Punj. (M) Oriental Sank Corporation v. 

Eec. no. 41. Fleming (1879) 3 Bom. 242, 267 ; see this 

() The framers of the New York draft case cited in the commentary on s. 13 at 

Code seem to have extracted this rule p. 66, supra. 

from Sulhley v. Wilford (1834) 2 01. & (v) This term has been obsolete for 

F. 102, 37 B. R. 39, which really pro- many years in English practice, 
ceeded on the much more intelligible 



96 THE INDIAN CONTRACT ACT. 

S. 18. sucli as to make the party who derives a benefit from the transaction equally 
answerable in effect as if he had been actuated by motives of fraud or 
deceit." In that case the plaintiffs, who were creditors of the defendants, 
sued to set aside a composition deed executed by their agents, alleging that 
their signature was obtained by a representation made by one of the defen- 
dants that the deed was nothing more than an assignment to trustees for 
the benefit of creditors, as agreed to in a previous meeting of the creditors. 
It was further alleged that the deed contained a release of which no mention 
was made at the meeting, and of which the plaintiffs' agents had no know- 
ledge. Under those circumstances the High Court of Bombay declared the 
release absolutely void, on the ground that the deed as it was signed was 
essentially different from that which the plaintiffs' agents intended to 
execute, or thought they were executing, when they affixed their signature 
to the deed. The Court went further, and said that there was another 
ground on which the plaintiffs were entitled to relief, namely, that there 
was a duty on the part of the defendants within the meaning of the present 
sub-section to communicate to the plaintiffs' agents the fact of the existence 
of the release, and that the breach thereof entitled the plaintiffs to avoid 
the transaction under s. 19 of the Act. But it is submitted that the first 
sub-section was more applicable, as there was a " positive assertion " by one 
of the defendants that the document was nothing more than a mere 
assignment of the creditors' property to trustees. 

Sub-s. 3. This sub-section was applied in a Bombay case (x), where 
it was held that though a company was not liable as drawer on a bill of 
exchange signed by two of the directors and the secretary, treasurer, and 
agent of the company, yet it was liable to the bank to which the bill 
was sold as for money received by the company to the use of the bank. 
The decision proceeded on the ground that the directors, while acting within 
the scope of their authority, had sold the bill as one on which the company 
was liable, but upon which, having regard to the form in which it was 
drawn, the company could not be rendered liable, and the directors were, 
therefore, guilty of misrepresentation within the meaning of the present 
sub-section. The case was no doubt within the terms of the Act, but it 
might have been decided on the broader ground that a buyer " is entitled 
to have an article answering the description of that which he bought," and 
that here the document which the bank had bought had not the force or 
value which it purported and was supposed to have. Thus it might be 
regarded as a case of common mistake under s. 20 of the Act, entitling the 
party who had paid money to recover it under s. 72. In The Oceanic Steam 

(te) In re Nursey Spinning and Weaving Co., Ltd, (1880) 5 Bom. 92. 



MISREPRESENTATION OF FACT OR LAW. 97 

Navigation Co. v. Soonderdas Dhurumsey (y) the defendants in Bombay S. 18. 
chartered a ship wholly unknown to them from the plaintiffs, which was 
described in the charter-party, and was represented to them, as being not 
more than 2,800 tonnage register. It turned out that the registered tonnage 
was 3,045 tons. The defendants refused to accept the ship in fulfilment 
of the charter-party, and it was held that they were entitled to avoid the 
charter-party by reason of the erroneous statement as to tonnage. It is 
difficult to see how the Court, having regard to the terms of the Act and to 
the evidence of the usage of Bombay and the understanding of the parties 
in the particular case, could have decided otherwise. But this case does 
not necessarily lay down any rule that an error in stating the amount of 
tonnage will' in general render a charter-party voidable. In England such 
a statement does not, in the absence of special circumstances, amount even 
to a warranty (z). As further illustrating the rule laid down in the present 
sub-section we might cite an earlier case, where it was held by the Allahabad 
Court that an agreement by the defendant to sell and deliver a boiler to the 
plaintiff at Rajghat was voidable at the option of the defendant, the plaintiff 
having represented (though innocently) to the defendant that there was a 
practicable road all the way, while, as a matter of fact, there was at one 
point a suspension bridge on a part of the way not capable of bearing the 
weight of the boiler (a). 

Misrepresentation of fact or law. It used to be said in English 
books that misrepresentation which renders a contract voidable must be of 
fact ; but there does not seem to be really any dogmatic rule as to repre- 
sentations of law. The question would seem on principle to be whether the 
assertion in question was a mere statement of opinion or a positive assurance 
especially if it came from a person better qualified to know that the 
law is so and so. It seems probable in England, and there is no doubt 
here, that at any rate deliberate misrepresentation in matter of law is a 
cause for avoiding a contract. Where a clause of re-entry contained in a 
JcabuUyat (counterpart of a lease) was represented by a zamindar's agent as 
a mere penalty clause, the Judicial Committee held that the misrepresenta- 
tion was such as vitiated the contract, and the zamindar's suit was 
dismissed (b). 

(y) (1890) 14 Bom. 241. been arrived at on the ground that the 

(z) Barlter v. Windle (1856) 6 E. & B existence of a practicable road all the 

675. way was an essential term or condition of 

() JoJinson v. Crowe (1874) 6 N.-W. P. the contract. Op. Pollock, Law of Fraud 

350. In fact, the agreement was made in British India, p. 101. 

several months before the Contract Act (b) Pertap Chunder v. MohmdranatK 

came into operation, but the case was Purkhait (1889) 17 Cal. 291, L. R. 16 

treated at every stage as if it fell within Ind. Ap. 233. 

the Act. The same result might have 

i.e. 7 



98 



THE INDIAN CONTRACT ACT. 



S. 19. 19. When consent to an agreement is caused by coer- 

cion (c}. fraud, or misrepresentation, the agree- 

Voidability of v " , r 

agreements without ment is a contract voidable at the option of 

free consent. 

the party whose consent was so caused. 
A party to a contract, whose consent was caused by fraud 
or misrepresentation, may, if he thinks fit, insist that the 
contract shall be performed, and that he shall be put in the 
position in which he would have been if the representations 
made had been true. 

Exception. If such consent was caused by misrepresenta- 
tion or by silence, fraudulent within the meaning of section 
17, the contract, nevertheless, is not voidable, if the party 
whose consent was so caused had the means of discovering 
the truth with ordinary diligence. 

Explanation. A fraud or misrepresentation which did 
not cause the consent to a contract of the party on whom 
such fraud was practised, or to whom such misrepresentation 
was made, does not render a contract voidable. 

Illustrations. 

(a) A., intending to deceive B., falsely represents that 500 maunds of 
indigo are made annually at A.'s factory, and thereby induces B. to buy 
the factory. The contract is voidable at the option of B. 

(b) A., by a misrepresentation, leads B. erroneously to believe that 
500 maunds of indigo are made annually at A.'s factoiy. B. examines the 
accounts of the factory, which show that only 400 maunds of indigo have 
been made. After this B. buys the factory. The contract is not voidable 
on account of A.'s misrepresentation. 

(c) A. fraudulently informs B. that A.'s estate is free from encumbrance. 
B. thereupon buys the estate. The estate is subject to a mortgage. B. 
may either avoid the contract, or may insist on its being carried out, and 
the mortgage debt redeemed (d). 

(d) B., having discovered a vein of ore on the estate of A., adopts 
means to conceal, and does conceal, the existence of the ore from A. 



(c) In s. 19, the words " undue influ- 
ence " have here been omitted, being 
repealed by the Indian Contract Act 
Amendment Act VI of 1899, s. 3. 

(d) Under the Transfer of Property 



Act IV of 1882, s. 55 (g), the seller, not 
having sold subject to encumbrances, is 
bound to discharge the encumbrance in- 
dependently of any question of fraud. 



VOIDABLE CONTRACTS. 99 

Through. A.'s ignorance B. is enabled to buy the estate at an under-value. S. 19. 
The contract is voidable at the option of A. 

(e) A. is entitled to succeed to an estate at the death of B. ; B. dies : 
C., having received intelligence of B.'s death, prevents the intelligence 
reaching A., and thus induces A. to sell him his interest in the estate. The 
sale is voidable at the option of A. 



Scope of the section. The section states the legal effect of coercion, 
fraud, and misrepresentation, in rendering contracts procured by them 
voidable; the foregoing sections have only laid down their respective 
definitions. Perhaps the most important parts of the section, certainly those 
which need the most careful attention, are the exception and the explana- 
tion. These mark, though hardly with practical completeness, the limits 
within which the rule is applied. Before considering them we have to 
pause on the second paragraph of the body of the section. It reads plainly 
enough at first sight, but the thought does not seem to be really clear. The 
party entitled to set aside a voidable contract may affirm it if he thinks fit. 
That is involved in the conception of a contract being voidable. And if 
he affirms it, he may require the performance of the whole and every part 
of it (subject to the performance in due order of whatever may have to be 
performed on his own part) or, in default thereof, damages for non-perform- 
ance (subject to special causes of excuse, if any, which we are not now 
considering). If, as may well be the case, the default is wholly or partly 
due to the non-existence of facts which the defaulting party represented as 
existing, this party can obviously not set up the untruth of his own state- 
ment by way of defence or mitigation ; and, if the case is a proper one for 
specific performance, and if it is in his power to perform the contract fully, 
though with much greater cost and trouble than if his statement had been 
originally true, he will have to perform it accordingly (e). Is anything 
more than this meant by the declaration of the affirming party's right to " be 
put in the position in which he would have been if the representations made 
had been true " ? (/). There are obviously many cases in which such 
restitution is not literally possible. Thus, if the owner of an estate subject 
to a lease for an unexpired term contracts to sell it to a purchaser who 

(e) See the Specific Relief Act, s. 18. default of his doing so the coutract is 

(/) The Indian Law Commissioners' voidable at the option of the person who 

draft was curiously worded (cl. 6) : has been misled." This, literally read, 

" A person who, either knowingly or says that the contract is voidable only if 

ignorantly, makes a false representation the representation, besides having been 

whereby he induces another to enter into untrue when made, cannot be subse- 

a contract with him, is bound to place quently made good. Such a restriction 

the other in the same position as if the of the misled party's rights is, we believe, 

representation had been true, and in unknown to the law. 

72 



100 THE INDIAN CONTRACT ACT. 

S. 19. requires immediate possession, and conceals the existence of the lease (//), 
the purchaser cannot be put in the same position as if the representation 
that there was no tenancy, or only such a tenancy as could be determined 
at will, had been true. Cases may occur, on the other hand, where a seller 
of land has held out, though not in express terms or wilfully, an element of 
attractiveness or security in the property offered for sale which it is in his 
power to realise by some act or undertaking on or with regard to adjoining 
property of his own. In such a case there is English authority for saying 
that he can enforce the contract only on the terms of making good what he 
has represented (h). But it is dangerous to formulate general propositions in 
the law of contract from decisions in suits for the specific performance of 
contracts relating to land, especially under the very peculiar English law 
and practice of sales of immovable property. Nor is it certain that the 
present enactment can always be literally relied on. A. sells a house to B., 
and by some blunder of A.'s agent the annual value is represented as being 
Ks. 2,000 when it is in truth only Bs. 1,000. According to the letter of the 
present paragraph, B. may insist on completing the contract and on having 
the difference between the actual and the stated value paid to him and his 
successors in title by A. and A.'s successors in title for all time. Nothing 
short of that will put him " in the position in which he would have been 
if the representations made had been true." This is obviously not the 
intention of the enactment. 

There is an important class of cases in which, although there is no such 
misrepresentation as to make the contract voidable, complete performance 
is, by reason of inisdescription or otherwise, unattainable, and specific 
performance will be decreed subject to compensation for the defect. It was 
originally proposed to deal with such cases in the Contract Act. The 
enactment governing them is now to be found in the Specific Relief Act, 
s. 14. No words in that section limit the subject-matter to which the rule 
can be applied, but in practice these questions occur only on the sale or 
letting of immovable property. 

Exception ; Means of discovering truth. The exception is wider we 
must suppose deliberately so than the corresponding English authorities. 
In England the principle is that if a man makes a positive statement to 
another, intending it to be relied on, he must not complain that the other 
need not have relied upon it. " The purchaser is induced to make a less 
accurate examination by the representation, which he had a right to 
believe " (t). The test is not whether the party might have inquired for 

(</) Morgan v. Government of Haidar- 8 Eq. 100. 

aiad (1888) 11 Mad. 419. (/) Dyer v. Hargrare (1805) 10 Ves. 

(h) Baskcomb v. Becltwith (1869) L. R. 505, 510, 8 E. K. at p. 39. 



MISREPRESENTATION: MEANS OF KNOWLEDGE. 101 

himself, but whether he did inquire and trust his own inquiries rather than S, 19. 
the representation (7c) ; and so far is this doctrine from being confined to 
cases of actual fraud that there is no decisive or recent authority for not 
applying it even to cases where the misrepresentation consists only in failing 
to disclose some fact which ought to be disclosed. No doubt there may be 
a question whether the party alleged to have misrepresented a fact really 
said, " I tell you it is so," or only " I think you will find it so." This 
question will, according to the circumstances, be of the construction of 
particular words, or of the inferences to be drawn from words and conduct. 
Again, the possession of obvious means of knowledge may lead, in some 
cases, to a fair inference that those means were used and relied on. But 
stiU the real point to be considered is whether the party misled did put his 
trust in the representation made to him of which he complains, or in other 
information j)f_hisown. In the latter case the misrepresentation did not 
really cause his consent. In other words, the present Exception, so far as 
allowed by English law, is logically nothing but a branch of the following 
Explanation. However, the words of the Exception are perfectly clear. If, 
as seems just possible, they were not intended to alter the English rule, they 
were chosen with singular infelicity. It will be observed that the Exception 
does not apply to cases of active fraud as distinguished from misrepresenta- 
tion which is not fraudulent (I). A vendor of a house and land knew 
that the purchaser wanted immediate possession, and, while admitting that 
the property was occupied by a tenant, first concealed the fact that the 
tenant had a lease, and then pretended that the lease was forfeited ; the 
purchaser was entitled to rescind the contract, although he might have 
ascertained by independent inquiry what the tenant's interest really was (m). 

The ordinary diligence of which the Exception speaks may be taken to / 
be such diligence as a prudent man would consider appropriate to the 
matter, having regard to the importance of the transaction in itself and of , 
the representation in question as affecting its results. A possibility of 
discovering the truth by inquiries involving trouble or expense out of 
proportion to the value of the whole subject-matter would not, it is 
conceived, be " means of discovering the truth with ordinary diligence." 
In Re Nursey Spinning and Weaving Co., Ltd. (ri), cited at p. 96, ante, 
it was contended on behalf of the company that the exception to s. 19 was 
applicable to that case, and that the bank could have discovered with 
ordinary diligence that the company was not liable on a bill drawn by its 

(A) Iledgrare v. Ilm-d (1881) 20 Ch. (m) Morgan v. Government of Haidar- 

Div. 1. alad (1888) 11 Mad. 419, 439. 

(Z) See Abdulla Khan v. Girdhari () (1880) 5 Bom. 92. 
Lai (1904) Punj. Eec. no. 49. 



102 THE INDIAN CONTRACT ACT. 

S. 19. secretary, treasurer, and agent. Sargent, J., said : " No ordinary 
diligence would have enabled the bank to discover that the company was 
not liable on this bill. The form of the bill would naturally lead the bank, 
as it admittedly did lead other banks, to suppose that it was the company's 
bill as represented, and the discovery could only be made by persons trained 
in the law and after a careful examination of legal authorities." But 
where a purchaser of rice stored up at a place to which he had an easy 
access refused to take delivery on the ground that the rice was of an inferior 
quality to that contracted for, it was held that he could not rescind the 
contract, for he could have discovered the inferiority of the quality by 
using " ordinary diligence " (0). 

Explanation : as to " causing consent." The principle of the caution 
given here is obvious. A false representation, whether fraijdulent^or 
innocent, is merely irrelevant if it has not induced the party to whom it 
was made to act upon it by entering into a contract or otherwise. He 
cannot complain of having been misled by a statement which did not lead 
him at all. In the common phrase of English text-books, the representation 
must be definable as dans locum contractui, bringing about the contract. 
Hence an attempt to deceive which has not in fact deceived the party can 
have no legal effect on the contract, not because it is not wrong in the eye 
of the law, but because there is no damage. This rule is applicable where 
a seller of specific goods purposely conceals a fault by some contrivance, 
in order that the buyer may not discover it if he inspects the goods, but 
the buyer does not in fact make any inspection (p). " Deceit which does 
not affect conduct cannot create liabilities " (q). In particular cases it may 
be hard to determine whether a certain representation was in fact relied 
upon so that it can be said to have caused consent to the contract. This 
question, where it arises, is a question not of law, but of fact (r), on which 
the character of the statement made and the probability that it would 
influence a reasonable man's determination may be taken into account. 
" If it is proved that the defendants with a view to induce the plaintiff (s) 
to enter into a contract made a statement to the plaintiff of such a nature 
as would be likely to induce a person to enter into a contract, and it is 
proved that the plaintiff did enter into the contract, it is a fair inference 



(o) Shoski Mo/tun Pal v. Nobo Jirixto 
(1878) 4 Cal. 801. 

(/;) Ilorsfall v. 'lliomas (1862) 1 H. & 
C. 20. 

(fl) Anson, p. 194. 

(/) Carrie v. Jtc/ntirk (1880) Punj. Rec. 
no. 41. 

(-v) Of course the positions of the party 



having made the statement and the party 
to whom it was made, as plaintiff and 
defendant, will depend on the form in 
which each case comes before the Court : 
the suit may be to enforce or to rescind 
the contract, or (as in the case now 
cited) to recover damages for the wrong 
of deceit. 



Jf 



UNDUE INFLUENCE I RESCISSION. 103 

of fact that he was induced to do so by the statement. ... Its weight as Ss. 19, 19A. 

evidence must greatly depend upon the degree to which the action of the / 

plaintiff was likely, and on the absence of all other grounds on which the 

plaintiff might act" (#). There is no rule of law that any particular kind ' 

of statement is necessarily material in some cases and immaterial in others. 

In general one man's money is as good as another's, and in a contract of 

loan the lender's personality is indifferent to the borrower ; but where a 

money-lender who has acquired an evil repute for hard dealing in his own 

name advertises and lends money in assumed names, it is a permissible 

inference of fact that the concealment of his identity was a fraud inducing 

the borrower to contract with him (a). The fact that a person has taken 

pains to falsify or conceal a fact is cogent evidence that to him at any rate 

that fact appeared material, and the falsification or concealment an 

important condition of obtaining the other party's consent. A man who 

has so acted cannot afterwards turn round and say, " It could have made 

no difference if you had known the truth." 

Illustrations. There is nothing calling for particular comment in the 
illustrations to this section, except that the case put in illustration (c) would 
now be more simply disposed of under the specific provisions of the 
Transfer of Property Act ; see the note on it above. 

Rescission of voidable contracts. As to the consequences of the 
rescission of voidable contracts, see s. 64. 

Specific Performance. As to the effect of fraud and misrepresentation 
on the rights of a party to claim or resist specific performance, see Specific 
Relief Act I of 1877, ss. 26 (a), (b), (c), 28 (b), 81, and 35 (a). 

19A. When consent to an agreement is caused by 
undue influence, the agreement is a contract 

Power to set aside 

contract induced by voidable at the option of the party whose 

undue influence. 

consent was so caused. 

Any such contract may be set aside either absolutely or, 
if the party who was entitled to avoid it has received any 
benefit thereunder, upon such terms and conditions as to the 

Court may seem just. 

Illustrations. 

(a) A.'s son lias forged B.'s name to a promissory note. B., 
under threat of prosecuting A.'s son, obtains a bond from A. for the 
amount of the forged note. If B. sues on this bond, the Court may 
set the bond aside. 

(t) Smith v. CJiadwicIt (1884) 9 App. (it) Gordon v. Street [1899] 2 Q. B.G41, 
Ca. 187, 196 (Lord Blackburn). C. A. 



104 THE INDIAN CONTRACT ACT. 

g t 19^, (b) A., a money-lender, advances Es. 100 to B., an agriculturist, 

and, by undue influence, induces B. to execute a bond for Es. 200 with 
interest at 6 per cent, per month. The Court may set the bond aside, 
ordering B. to repay the Es. 100 with such interest as may seem just. 



This section appears to be intended to give express sanction to the 
constant practice of Indian as well as English Courts in cases of unconscion- 
able money-lending, namely, to relieve the borrower against the oppressive 
terms of his contract, but subject to the repayment to the lender of the 
money actually advanced with reasonable interest (#). (See the illus- 
trations.) The rate of interest allowed by the High Courts as reasonable 
has varied, according to circumstances, from 6 and 12 per cent, in Bengal 
to 24 per cent, in Bombay and the North-West Provinces (y). 

The second paragraph is the only portion of the section that is new. 
However, as it stands it is virtually a reproduction of ss. 35 and 38 of the 
Specific Relief Act. The combined effect of those two sections is that a 
contract in writing may be rescinded at the suit of a party when (amongst 
other causes) it is voidable, but that the Court may require the party 
rescinding to make any compensation to the other which justice may 
require. It may be noted that under the present section the contract need 
not be in writing. 

The Select Committee gave the following reason for adding this section 
to the Act : 

" We have recast the language of the new s. 19A of the Act of 1872 
proposed by cl. 3 of the Bill, so as to bring it more closely into accord with 
the language of s. 19. A contract obtained by undue influence is on a 
different footing from a contract obtained by fraud. In the case of the 
latter, a party who, with knowledge of the fraud, has taken any benefit 
under the contract, is held to have elected to affirm it ; but where a contract 
has been obtained through the exercise of undue influence it is necessary 
that the Court should have power to relieve the party who acted under the 
undue influence, even although he may have received some benefit under 

(a?) Cited with approval in PomaDongra was allowed); Dhanipal Das v. Maneshar 

v. William Gillespie (1907) 31 Bom. 348, Bahhsli Singh (1906) 28 All. 570, L. B. 33 

at p. 352. Ind. Ap. 118 (where 18 per cent, was 

(y) Motluwrmohun Roy v. Soorendro allowed) ; Balkishan Das v. Madan Lai 

Narain Del (1875) 1 Cal. 108 ; Mackintosh (1907) 29 All. 303 (where 24 per cent, was 

v. Hunt (1877) 2 Cal. 202 ; Chunni Kuar allowed) ; Poma Dongra v. William 

\. Hup Singh (1888) 11 All. 57, affirmed Gillespie (1907) 31 Bom. 348 (where 24 

in appeal sub noni. Raja Mohkam Singh per cent, was allowed). And see notes to 

v. Raja Rup' Singh (1893) 15 All. 352, s. 16 under the head "Unconscionable 

L. K. 20 Ind. Ap. 127 (where 20 per cent. Bargains'," p. 83, above. 



MISTAKE OF FACT. 105 

the contract. On the other hand, where such benefit has been received Ss. 19A, 20. 
the Court ought to have full power to impose such conditions as may be 
just upon the party seeking relief." 

20. Where both the parties to an agreement are under 
Agreement void a mistake as to a matter of fact essential to 
the agreement, the agreement is void. 



as to matter of fact. T , 7 . . . . 

Explanation. An erroneous opinion as to 
the value of the thing which forms the subject-matter of the 
agreement is not to be deemed a mistake as to a matter 

of fact. 

Illustrations. 

(a) A. agrees to sell to B. a specific cargo of goods supposed to be \i \A \y 
on its way from England to Bombay. It turns out that, before the day , ^flV 
of the bargain, the ship conveying the cargo had been cast away, and * -=. \ 
the goods lost. Neither party was aware of these facts. The agreement * 

is void. [Couturier v. tiastie (1856) 5 H. L. 0. 673.] **f 

(b) A. agrees to buy from B. a certain horse. It turns out that \ 

the horse was dead at the time of the bargain, though neither party vr" 1 *. _ . , 
was aware of the fact. The agreement is void. [Pothier, Contrat de ^j) jT^f 

Vente, cited 5 H. L. 0. 678; so in modern French Law, Code Civ. .. 
1601. For Eoman example see Pollock on Contract, 7th ed. 489.] ' ' * 

(c) A., being entitled to an estate for the life of B., agrees to sell 
it to C. B. was dead at the time of the agreement, but both parties 
were ignorant of the fact. The agreement is void. [Strickland v. Turner 
(1852) 7 Ex. 208 ; Cochrane v. Willis (1865) L. E. 1 Ch. 58.] 



Scope of the section. The practical scope of this section is shown 
(though not completely) by the illustrations. No doubt is possible as to 
the actual solution, in any civilised system of jurisprudence, of the cases 
put. But the wording of the section (which follows the Indian Law Com- 
missioners' original draft) tends to obscure the principle which governs 
them. It is not that the mistake has any special operation because it is a 
mistake, but that the true intention of the parties was to make their agree- 
ment conditional on the existence of some state of facts which turns out 
not to have existed at the date of the agreement. Where the contract was 
for the sale of an object not existing, or which had ceased to exist according 
to the description by which it was contracted for, the result is still more 
easily apprehended if we say that there was nothing to buy and sell. 

Indian decisions have furnished a few more illustrations. The section 
will no doubt continue to be interpreted, as occasion arises, largely and 
beneficially. 



106 THE INDIAN CONTRACT ACT. 

S. 20. The mistake must be as to an existing fact. The mistake must be 

" as to a matter of fact essential to the agreement." It is not enough that 
there was an error " as to some point, even though a material point, an 
error as to which does not affect the substance of the whole consideration " (z). 
The circumstance, therefore, that neither the lessor nor the lessee supposed 
at the date of the lease that the Government assessment would ever be 
increased will not avail the lessor to avoid the lease if the assessment is 
subsequently enhanced (). " The circumstance that both the parties to 
the lease supposed that the assessment would never be increased did not 
prevent their united will from forming a contract, any more than from 
making the terms of the contract, when thus concluded, from being 
binding, in spite of any future change of circumstances " (#). As observed 
by the Judicial Committee in Peria Sami v. Representatives of jSalugar, 
" the grant, whatever its effect, was not necessarily avoided because subse- 
quent events disappointed the expectation in which it was made " (c). But 
where a settlement was entered into between Government and certain 
inamdars in respect of a village whereby the latter agreed to pay a certain 
yearly quit-rent, and both parties believed that the inamdars were the 
superior holders of all the lands in the village, it was held that the 
settlement was void as regards a portion of the lands which subsequently 
turned out to be ivanta lands held by certain girassias as owners in 
possession (d). Upon the same principles a compromise of a suit will be 
set aside if it was brought about under a mistake as to the subject-matter 
of the agreement (e). The view thus expressed is confirmed by later 
English cases. Not only a compromise (/), but an order of the Court 
made by consent (#), may be set aside if the arrangement was entered into 
even under a one-sided mistake of counsel to which the other party, however 
innocently, contributed, or even otherwise if the mistake was such as to 
prevent any real agreement from being formed. A fortiori it is so in the 
case of the mistake being common to both parties (li). The existence of 
a separate warranty in a contract of sale is evidence that the matter of the 
warranty is not an " essential " part of the contract. In such case, if 
there is a breach of the warranty, the purchaser is only entitled to compen- 
sation for the breach, and the sale is not even voidable. It is still a 

(s) Per Blackburn, J., in Kennedy v. (ti) Bibee Solomon v. Abdool Azeez 

Panama Mail Co. (1867) L. R. 2 Q. B. (1881) G Cal. 687, 706. 

580, 588. (/) Hickman v. Serena [1895] 2 Cb. 

(a) Babshettiy. Venkataramana(1879) 638. 

3 Bom. 154. (0) Wilding v. Sanderson [1897] 2 Ch. 

(A) Ibid., p. 158. 534. 

0) (1878) L. R. 5 Ind. Ap. 61, at p. 73. (li) Hitddersfield Banking Co. v. If. 

(d) Secretary of State for India v. Lister # Son [1895] 2 Ch. 273. 
SJteth JeahhiffbJiai (1892) 17 Bom. 407. 



MISTAKE OF FACT. 107 

stronger case where not only no warranty is given by the vendor, but the S. 20. 
purchaser buys " subject to all defects." Thus, where a mortgagee sold 
his claim under the mortgage subject in effect to all defects, and it was 
subsequently discovered that the mortgage was inoperative, as it was 
attested by only one witness, it was held that, though both parties were 
ignorant of that fact at the time of the assignment, the purchaser was 
not entitled to rescind the contract and claim back the purchase-money, the 
purchase having been made subject to all defects (f). An administration 
bond given under s. 256 of the Indian Succession Act, 1865, is not void 
under this section, though the party to whom the grant of letters of 
administration is made may have obtained the grant by fraud upon the 
Court, and though neither the sureties nor the Court to which the bond is 
passed were aware of the fraud when the grant was made. It was so held 
by the majority of the High Court of Calcutta in a recent case. In that 
case letters of administration of the estate of a deceased person were 
granted to A. on execution of a bond by him and two sureties engaging 
for the due administration of the estate. It was subsequently discovered 
that A. was not entitled to the grant, and that he had obtained it by false 
and fraudulent representations made in his petition for letters of adminis- 
tration. The grant to A. was thereupon revoked, and a suit was brought 
against the sureties to recover from them the amount misappropriated by 
A. and forming part of the estate. One of the defences raised on behalf 
of the sureties was that the bond was void under the present section, and 
that they were not therefore liable upon the bond. It was contended that 
both the Court and the sureties were under a mistake as to a matter of fact 
"essential" to the agreement, namely, that A. was entitled to letters of 
administration, and that the sureties would not have executed the bond but 
for that mistake. But this contention was overruled, and it was held by a 
majority of the Court that the mistake of the Court and of the sureties did 
not relate to the essential subject of the contract. The decision was also based 
on the ground that the liability of sureties under an administration bond 
did not depend on the validity or invalidity of the grant (/). The decision 
of the majority was upheld in appeal to His Majesty in Council (jj"). The 
same principle has been held- to apply to surety bonds under the Guardians 
and Wards Act VIII of 1890. Thus, where A. was appointed guardian of 
the property of a minor on passing a bond to the District Court executed by 
him and B. as surety for the due management and realisation of the minor's 
property, and failed to account for the income of certain property which 

(/') 8nda Karavr v. Tudepally (1907) of Bengal (1906) 33 Cal. 713; see parti- 
30 Mad. 284. cularly pp. 739-740, 746-747, 751, and 755. 

(j) Debcndra Nath Butt v. Adm.-Gcn. (.//) S. C. (1908) 12 C. W. N. 802. 



108 THE INDIAN CONTRACT ACT. 

Ss. 20, 21. actually belonged to the minor, but was not included in the list of properties 
belonging to the minor annexed to the petition for his appointment, it was 
held that B. was liable to make good the amount, though it might be said 
that both the Court and B. were led to believe by A. that the property did 
not belong to the minor (&). See also the commentary on s. 13, above. 

Specific Performance. As to the right of a party to resist specific 
performance of a contract on the ground of mistake see Specific Relief 
Act, s. 26 (a) and (b) and s. 28 (a). 

Rectification. The Courts will not rectify an instrument on the ground 
of mistake unless it is shown that there was an actual concluded contract 

(antecedent to the instrument sought to be rectified, and that the contract 
is inaccurately represented in the instrument. Thus in a Bombay case (/) 
the plaintiffs chartered a steamer from the defendants to sail from Jedda 
on " the 10th August, 1892 (fifteen days after the Haj)?' in order to 
convey pilgrims returning to Bombay. The plaintiffs believed that " the 
10th August, 1892," corresponded with the fifteenth day after the Hty, 
but the defendants had no belief on the subject, and contracted only with 
respect to the English date. The 19th J uly, 1892, and not the 10th August, 
1892, in fact corresponded with the fifteenth day after the Haj. On finding 
out the mistake the plaintiffs sued the defendants for rectification of the 
charter-party. It was held that the agreement was one for the 10th August, 
1892; that the mistake was not mutual, but on the plaintiffs' part only ; 
and, therefore, that there could be no rectification. The Court further 
expressed its opinion that even if both the parties were under the mistake 
the Court would not rectify, but only cancel, the instrument, as the agree- 
ment was one for the 10th August, 1892, and that date was a matter 
materially inducing the agreement. See also Specific Relief Act, s. 31, 
and the undermentioned case (m). 

Compensation. Note, in connection with the present section, the pro- 
vision of s. 65 that when an agreement is discovered to be void any person 
who has received any advantage under the agreement is bound to restore 
it, or to make compensation for it, to the person from whom he received it. 

21, A contract is not voidable .because it was caused 
Effect of mistakes ^ a mistake as to any law in force in British 
India ; but a mistake as to a law not in force 
in British India has the same effect as a mistake of fact. 

(k) Samt Chandra Roy v.ItajoniMuJtan Co. (1892) 16 Bom. 561. 

Roy (1908) 12 C. W. N. 481. (m) Madharji v. Ramnatli (1906) 30 

(7) Haji Abdul Rahman Allarakhia v. Bom. 457. 
Tlie Bombay and Persia Steam Navigation 



MISTAKE OF LAW. 109 

Illustrations. S. 21. 

A. and B. make a contract grounded on the erroneous belief that a 
particular debt is barred by the Indian law of limitation. The contract 
is not voidable. 

A. and B. make a contract grounded on an erroneous belief as to 
the law regulating bills of exchange in France. The contract is 



In the second illustration voidable is an obvious slip for void, which 
is required both by legal principle and by the express terms of s. 20. If 
there is really a common mistake on an essential matter of fact, there is no 
contract at all, and nothing which either party can enforce. An erroneous 
belief can make a contract voidable only when it has been induced in one 
party by the fraud or misrepresentation of the other. 

The general language of the section itself represents with approximate 
fidelity the current doctrine of text-books down to the time when the Act 
was framed, namely, that relief is not given against mistake of law. How- 
ever, modern authority has shown that the doctrine in question is not 
acceptable without rather large qualifications, which, it is apprehended, 
Indian practitioners cannot safely neglect. Certainly mistake of law does 
not universally or generally invalidate transactions in which it occurs ; 
but neither does mistake of fact. A man cannot go back upon what he has 
deliberately done not to speak of excusing himself from liability for a 
wrongful act or offence merely because he alleges that he acted under a 
misapprehension of the law. It is a citizen's business to know, by taking 
professional advice or otherwise, so much law as concerns him for the 
matters he is transacting. No other general rule is possible, as has often 
been observed, without offering enormous temptations to fraud. Neverthe- 
less in England, at any rate, " it is not accurate to say that relief can never 
be given in respect of a mistake of law " (ri) ; for where the mistake is so 
fundamental as to prevent any real agreement " upon the same thing in the 
same sense " (s. 13, above) from being formed it is immaterial of what kind 
the mistake was,' or how brought about. And in India it would seem that 
the present section was not intended to give validity to any apparent 
agreement not satisfying the conditions of real consent as laid down in 
ss. 10 and 13. Moreover, it is to be observed that the existence of particular 
private rights is matter of fact, though depending on rules of law, and 
for most civil purposes ignorance of civil rights a man's ignorance that 
he is heir to such and such property, for instance is ignorance of fact. A 
man's promise to buy that which, unknown to him, already belongs to him 
is not to be made binding by calling his error as to the ownership a mistake 

O) Allcard v. Walker [1896] 2 Ch. 3G9, 381, per Stirling, J. 



110 THE INDIAN CONTRACT ACT. 

S. 21. of law (0). There seems to be nothing to prevent the Indian Courts from 
following English authority in cases of this kind. 

Again, the section does not say that misrepresentation, at any rate 
wilful misrepresentation, of matter of law, may not be ground for avoiding 
a contract under s. 17 or s. 18. 

As to the second clause of the section, British Indian jurisprudence 
has adopted the rule of the Common Law that foreign law is a matter 
of fact, and must be proved or admitted as such, though the strictness 
of the rule has been somewhat relaxed by the Evidence Act (p). 
Accordingly the statement or finding of any foreign law on which the 
Court proceeds in a given case is no more binding on the Court in 
any future case, even apart from the possibility of alteration in the law 
in question, than any other determination or assumption as to matters 
of fact. 

The cases in which the present section has actually been applied have 
been fairly simple. Thus where a mortgage bond provided that if the 
mortgagor failed to redeem the mortgaged property within eight years the 
mortgagee should be the owner of the property, and the mortgagor, being 
unable to redeem, executed an absolute transfer of the property to the 
mortgagee, and put him in possession, it was held that a purchaser from 
the mortgagor of the equity of redemption subsequent to the date of the 
transfer was not entitled to redeem, even though the mortgagor might have 
been ignorant of his right to redeem the mortgage notwithstanding the 
clause in the mortgage precluding him from doing so (q). Here there was 
a complete conveyance and transfer of possession from the mortgagor to 
the mortgagee. But if the matter had rested in contract only, and there 
was no transfer of the mortgaged property, the mortgagor would have 
been entitled to redeem the mortgage, on the principle " Once a mortgage, 
always a mortgage." There would have been no consideration for a 
promise to transfer the property to the mortgagee, and the question whether 
there was any mistake, and, if so, whether of fact or law, would really have 
been superfluous. 

An erroneous belief that a widow forfeits by her remarriage the rights 
of an occupancy tenant under the N.-W. P. Tenancy Act, to which she 
has succeeded on the death of her first husband as his heir, is a mistake of 

(o) See Cooper v. Pkibbs, L. R. 2 H. L. of the Government of such country and 

1 70. to contain any such law, and any report 

{p) Indian Evidence Act, s. 38 : " When of a ruling of the Courts of such country 

the Court has to form an opinion as to a contained in a book purporting to be a 

law of any country any statement of such report of such rulings, is relevant." 

law contained in a book purporting to be (gO Vishnu Sahharam v, Kashinath 

printed or published under the authority (1886) 11 Bom. 174. 



MISTAKE OF LAW. Ill 

law, and a contract grounded on such belief is not voidable, though the mis- Ss. 21, 22. 
take may be common to both the parties to the contract (r). Similarly, an 
erroneous belief that a judgment-debtor is bound by law to pay interest 
on the decretal amount, though no interest has been awarded by the 
decree, is a mistake of law, and a contract grounded on such belief is 
not voidable. Such a belief is not a belief as to a matter of fact essential 
to the agreement within the meaning of s. 20. It was so held by the 
Privy Council in Seth GoTcul Dass v. Murli(s). It is difficult to reconcile 
with this a recent decision of the Bombay High Court where it was held 
that a contract founded upon the erroneous belief that a judgment-debtor 
is bound by law to pay interest on the decretal amount, though no interest 
has been awarded by the decree, was void under s. 20, as being a contract 
entered into under a mistake as to a matter of fact essential to the agree- 
ment (t}. It was said in that case that such a mistake was " a mistake as 
to the private rights of the parties and as such a mistake of fact." 
That such a mistake is not a mistake of fact, but one of law, is 
abundantly clear from Seth Gokul Lass's Case, where their Lordships said : 
" There was, no doubt, a mistake of laiv on the part of the defendants in 
supposing that execution could be issued for interest upon the amount 
decreed from the date of the decree to the date of realisation, no such 
interest having been awarded by the decree. But that mistake appears to 
have been common not only to the plaintiff and the defendants, but also 
to the [Court which made the order of attachment] " (11). 

22. A contract is not voidable merely because it was 
Contract caused by caused by one of the parties to it being under 

mistake of one party 

as to matter of fact, a mistake as to a matter of fact. 

At this day this section may seem open to the remark that it contra- 
dicts a proposition which no competent lawyer would think of asserting. 
But when the Act was framed it was not obviously superfluous ; for strange 
things had been said within the foregoing ten years or thereabouts by one 
or two of the Judges of the Court of Chancery, and lawyers practising in 
the Courts, as they then were, of common law were not expected to have 
any knowledge of equity, and regarded the doctrines laid down in the 
name of equity by Vice-Chancellors as mysteries which did not concern 
them. 

As an illustration of the rule, Haji Abdul Rahman Allarakhia v. The 

(r) Sabihan B'ibl v. Madho Lai (1907) L. R. 417. 

All. W. N. 197. () (1878) 3 Gal. 602, at p. 608, L. R. 

(*) (1878) 3 Gal. 602, L. R. 5 Ind. Ap. 78. 5 Ind. Ap. 78. 
(t) Narayan v. Raojl (1904) 6 Bom. 



112 THE INDIAN CONTRACT ACT. 

Ss. 22, 23. Bombay and Persia Steam Navigation Go. (x), cited in the commentary on 
s. 20, p. 108, above, may be referred to. 

23. The consideration or object of an agreement is 

What considers lawful, UnleSS 

tions and objects -j. f nr Vvj;|rI/iri Vv law nr 

are lawful and what ICldCn Dy law , ( 

not> is of such a nature that, if permitted, it 

would defeat the provisions of any law ; or 
is fraudulent ; or 
involves or implies injury to the person or property of 

another; or 
the Court regards it as immoral, or opposed to public 

policy. 

In each of these cases, the consideration or object of an 
agreement is said to be unlawful. Every agreement of which 
the object or consideration is unlawful is void. 

Illustrations. 

(a) A. agrees to sell his house to B. for 10,000 rupees. Here B.'s 
promise to pay the sum of 10,000 rupees is the consideration for A.'s 
promise to sell the house, and A.'s promise to sell the house is the 
consideration for B.'s promise to pay the 10,000 rupees. These are 
lawful considerations. 

(b) A. promises to pay B. 1,000 rupees at the end of six months if 
0., who owes that sum to B., fails to pay it. B. promises to grant 
time to 0. accordingly. Here the promise of each party is the con- 
sideration for the promise of the other party, and they are lawful 
considerations. 

(c) A. promises, for a certain sum paid to him by B., to make 
good to B. the value of his ship if it is wrecked on a certain voyage. 
Here A.'s promise is the consideration for B.'s payment, and B.'s 
payment is the consideration for A.'s promise, and these are lawful 
considerations. 

(d) A. promises to maintain B.'s child, and B. promises to pay A. 
1,000 rupees yearly for the purpose. Here the promise of each party 
is the consideration for the promise of the other party. They are 
lawful considerations. 

(e) A., B., and C. enter into an agreement for the division among 
them of gains acquired, or to be acquired, by them by fraud. The 
agreement is void, as its object is unlawful. 

(a?) (1892) 16 Bom. 561. 



UNLAWFUL OBJECTS. 113 

(f) A. promises to obtain for B. an employment in the public S. 23. 
service, and B. promises to pay 1,000 rupees to A. The agreement is 

void, as the consideration for it is unlawful. 

(g) A., being agent for a landed proprietor, agrees for money, 
without the knowledge of his principal, to obtain for B. a lease of 
land belonging to his principal. The agreement between A. and B. 
is void, as it implies a fraud by concealment by A., on his 
principal. 

(h) A. promises B. to drop a prosecution which he has instituted 
against B. for robbery, and B. promises to restore the value of the 
things taken. The agreement is void, as its object is unlawful. 

(i) A.'s estate is sold for arrears of revenue under the provisions of 
an Act of the Legislature, by which the defaulter is prohibited from 
purchasing the estate. B., upon an understanding with A., becomes 
the purchaser, and agrees to convey the estate to A. upon receiving 
from him the price which B. has paid. The agreement is void, as it 
renders the transaction, in effect, a purchase by the defaulter, and 
would so defeat the object of the law. 

(j) A., who is B.'s mukhtar, promises to exercise his influence, as 
such, with B. in favour of 0., and 0. promises to pay 1,000 rupees to 
A. The agreement is void, because it is immoral. 

(k) A. agrees to let her daughter to hire to B. for concubinage. 
The agreement is void, because it is immoral, though the letting may 
not be punishable under the Indian Penal Code. 



Unlawful objects. By s. 10 an agreement is a contract (i.e., enforce- 
able) only if it is made for a lawful consideration and with a lawful object. 
The present section declares what kinds of consideration and object are 
not lawful. Its phraseology is not happy (?/). Properly we speak of the 
consideration for a promise, not the consideration of an agreement. If I 
agree to sell you a piece of land for Us. 20,000, my promise to convey the 
land is the consideration for your promise to pay the price, and your 
promise to pay the price is the consideration for my promise to convey 
the land. There is nothing that can be called the consideration of the 
agreement between us as a whole. If we read " promise " for " agree- 
ment," the text becomes clearer ; and s. 2 (e) (p. 11, above), though that 
sub-section is itself not as clear as might be desired, appears to warrant us 
in doing this. See also illustration (a) to the present section. 

Recently Sale, J., pointed out (what indeed seems obvious) that the 
word " object " in this section wag not used in the same sense as " con- 
sideration," but was used as distinguished from "consideration " and meant 
" purpose " or " design." It was so observed in a case where A. had agreed 

(y) The illustrations correspond very inissioners in the first draft, cl. 10. The 
nearly to those framed by the Law Com- text is quite different. 

I.C. 8 



114 THE INDIAN CONTRACT ACT. 

S. 23. to sell goods to B., and B. while in insolvent circumstances assigned the 
benefit of the contract to his brother-in-law C. for a consideration of 
Rs. 100, the object both of B. and C. being to defraud B.'s creditors. It 
was said that the consideration for the assignment, namely, the sum of 
Rs. 100, was lawful, but the object was unlawful, as it was to defeat the 
provisions of the Insolvency Act (z). 

With regard to a consideration being forbidden by law, it is to be 
observed that, where the consideration is a promise, it may be forbidden in 
one of two distinct senses. The promise may be of something which it 
would be unlawful to" perform ; and here it is perhaps simpler to say that 
the object of the agreement, namely, the unlawful performance, is forbidden. 
Sometimes, on the other hand, although there is nothing unlawful in 
performing the promise, a positive rule of law, founded on reasons of 
general expediency, will not suffer any legal obligation to arise from a 
promise of that kind. So it is in the cases of wagers, and of agreements in 
restraint of trade outside the limited sanction given to them. In such 
cases we shall say that the object of the agreement is not unlawful if by 
" object " we mean the actual performance ; but we shall say that it is 
unlawful if by " object " we mean the creation of an obligation to perform 
the things promised. This ambiguity is cot cleared up by anything in the 
language of the Act. It does not, however, seem material for any practical 
purpose. 

There is another possible reason, however, for the use of the word 
" consideration." A man may enter into a contract lawful in itself, and 
perform it in such a manner or by such means as to violate some distinct 
requirement or prohibition of the law. By so doing he may deprive himself 
of any claim to recover on the other party's promise to pay for his work, 
and this whether the other party knew anything beforehand of his unlawful 
action or not. Now in an agreement by mutual promises each of the 
promises is, properly speaking, the consideration, and the only considera- 
tion, for the other ; but in discussing the subsequent duties of the parties 
as to performance the word " consideration " is sometimes applied, in a 
loose and extended sense, to those cases where the duty of performance on 
the one part is, according to the original intent of the agreement, con- 
ditional on previous or simultaneous performance on the other. In this 
inaccurate but not uncommon sense it may be said that, when a promisor 
who might have performed his promise lawfully performs it unlawfully, 
the consideration for the reciprocal promise becomes unlawful ; and the 
language of the Act may have been designed to cover such cases. A 

(z) Jaffer MeJier All v. Budge Budge Jute Mills Co. (1906) 33 Cal. 702, 710, 
8. c. on appeal (1907) 34 Cal. 289, 



UNLAWFUL OBJECT OR CONSIDERATION. 115 

typical English example is Beasley v. Bignold(a), where a printer, having S. 23. 
put a false imprint on a pamphlet, instead of his true name and address, 
as required by statute, was not allowed to recover the price of his work. 
It does not appear whether the defendant was a party to the falsification or 
not, or for what purpose it was done. Here a personal and quasi-penal 
disability is imposed on the plaintiff for reasons of general policy without 
regard to the original character of the agreement, and with the result of 
conferring corresponding gain on the defendant, whose deserts may be no 
better in themselves. Practically it is convenient to treat these cases under 
the head of unlawful agreements, as the broad principles and the results 
are the same. 

Unlawful intention, like negligence, is not presumed by the law, nor is 
any man expected to presume it without evidence. Therefore, if a contract 
can on the face of it be lawfully performed, the existence of an undisclosed 
mtentio-n_-by one party to perform ib unlawfully, or use it as part of an 
unlawful scheme, will not disable the other party from enforcing it, at any 
rate by way of damages ; and if the construction is doubtful, that con- 
struction, which admits of a lawful performance is to be preferred. Again, 
if there exists or arises a legal impediment, unknown to the parties at the 
time of contracting, to the performance of a contract in the manner which 
otherwise would have been the most obvious, this will not of itself avoid 
the contract if it can still be substantially performed without breaking the 
law(&). But if both parties in fact contemplate an unlawful manner of 
performance, the case falls within the rule " that a contract lawful in 
itself is illegal if it be entered into with the object that the law should be 
violated " (&). A contemplated unlawful or immoral use of property 
(including money) to be obtained under a contract is an unlawful object 
within the meaning of this rule, and this whether such use is part of the 
bargain or not, and whether the party supplying the property is to be paid 
out of the profits of its unlawful use or not. If both parties know of the 
wrongful or immoral intention, the agreement is void; if the party who is 
to furnish the property does not know of it, the contract is voidable at his 
option when he discovers the other party's intent. This is so well settled 
by several English decisions that it suffices to refer to the more recent 
ones (c). 

An agreement may be rendered unlawful by its connection with a past 
as well as with a future unlawful transaction. Thus the giving of security 

(a) (1822)5 B.& Aid. 355, 24 R.K.401. 626 ; Cowan v. Milbourn (1867) L. R. 2 
(b*) Waugh v. Morris (1873) L.' R. 8 Ex. 230. But a transfer of property once 

Q. B. 202 ; see especially at pp. 207, 208. executed in possession cannot be set aside 
(c) Pearce v. Brooks (1866) L. R. 1 Ex. on this ground : Ayerst v. Jenkins (1873) 

213 ; Smith v. White (1866) L. 11, 1 Eq. L, R. 1C Eq. 275. 

82 



116 THE INDIAN CONTRACT ACT. 

S. 23.. for money purporting to be payable under an agreement whose purpose 
was unlawful is itself an unlawful object, even though it was not stipulated 
for by the original agreement (d). 

With regard to the tendency of an agreement to " defeat the pro- 
visions of any law," these words must be taken as limited to defeating the 
intention which the Legislature has expressed, or which is necessarily 
implied from the express terms of an Act. It is unlawful to contract to do 
that which it is unlawful to do ; but an agreement will not be void 
merely because it tends to defeat some purpose ascribed to the Legislature 
by conjecture, or even appearing, as matter of history, from extraneous 
evidence, such as legislative debates or preliminary memoranda not forming 
part of the enactment. It is not defeating the provisions of a law to take 
A advantage of the lack of any provision for some particular case. If the 
/ enactment as it stands is intelligible, the Court cannot assume that the 
I omission was not intended. 

An agreement entered into with a fraudulent object is a particular 
species of the genus of agreements contemplating or involving injury to 
the person or property of another. The general term " injury " means 
criminal or wrongful harm. Evidently there is nothing unlawful in 
agreeing to carry on a business lawful in itself, though the property of 
rivals in that business may, in a wide sense, be injured by the consequent 
and intended competition. 

There is no department of the law in which the Courts have exercised 
larger powers of restraining individual freedom on grounds of general 
utility, and it is impossible to provide in terms for this discretion without 
laying down that all objects are unlawful which the Court regards as 
immoral or opposed to public policy. The epithet " immoral " points, in 
legal usage, to conduct or purposes which the State, though disapproving 
them, is unable, or not advised, to visit with direct punishment. " Public 
policy " points to political, economical, or social grounds of objection, out- 
side the common topics of morality, either to an act being done or to a 
I promise to do it being enforced. Agreements or other acts may be con- 
trary to the policy of the law without being morally disgraceful or exposed 
to any obvious moral censure. 

English authorities on the subject of agreements being held un- 
enforceable as running counter to positive legal prohibitions, to morality, or 
to public policy, are extremely voluminous and various. Many of them are 
inapplicable to the circumstances of British India ; not that the elementary 

(d) Fisher v. Bridges (1854) 3 E. & B. has been extra-judicially criticised, but 
342, 97 B. R.701, Ex. Ch. ; Geare.v. Mare seems quite sound. 
(1863) 2 H. & C. 339. This doctrine 



ACTS FORBIDDEN BY LAW. 



117 



rules of law or morality differ in substance in England and in India, but 
because under the conditions of Indian manners and society such facts 
as are dealt with by certain classes of English decisions do not occur. 
References to some of the English cases on matters of general interest will 
be found in the judgments of Indian Courts digested below. Some topics, 
on the other hand, are still of practical importance in India, though they 
are obsolete or all but obsolete in England. "We proceed to discuss the 
several heads of the section with reference to the Indian authorities. 

" Forbidden by law." An act or undertaking is equally forbidden 
by law whether it violates a prohibitory enactment of the Legislature or a 
principle of unwritten law. But in British India, where the criminal law 
is codified, acts forbidden by law would seem practically to consist of acts 
punishable under the Penal Code and of acts prohibited by special legisla- 
tion, or by regulations or orders made under authority derived from the 
Legislature, whether the special enactment or regulation be for the pro- 
tection of the public revenue, the prevention of disease, the security of 
traffic and maintenance of general order, or for any other purposes 
incidental to civil administration. Parties are not, as a rule, so foolish as 
to commit themselves to agreements to do anything obviously illegal, or at 
any rate to bring them into Court ; so the kind of question which arises 
in practice under this head is whether an act, or some part of a series 
of acts, agreed upon between parties, does or does not contravene some 
legislative enactment or regulation made by lawful authority. The decision 
of such a question may turn on the construction of the agreement itself, or 
of the terms of the Act or other authoritative document in question, or on 
both. In particular it may have to be considered whether the intention of 
the legislator was to prevent certain things from being done, or only to lay 
down terms and conditions on which they might be done. It is easy to 
say that properly drawn Acts or Regulations ought to leave no doubt on 
that point, but experience has shown that such doubts are possible and 
have not been uncommon. Broadly speaking, that which has been for- 
bidden in the public interest cannot be made lawful by paying the penalty 
for it ; but an act which is in itself harmless does not become unlawful 
merely because some collateral requirement imposed for reasons of mere 
administrative convenience has been omitted. There was a time when the 
English Courts almost regarded it as meritorious to evade statutory regula- 
tions, and encouraged evasions of them by fine distinctions ; but such has 
longed ceased to be the judicial policy at home, and in India it would be 
extremely unwise to rely on old decisions of that kind, even when they 
have not been overruled or judicially censured. 

It is possible for a statute to attach a penalty to making a particular 
kind of agreement, and at the same time to provide that such an agreement, 



S. 23. 



118 THE INDIAN CONTRACT ACT. 

S. 23. if made, shall not be, therefore, void. We do not know of more than one 
such case in England (e), or of any in British India. 

Cases under this head have arisen principally in connection with 
Excise Acts, and they have all been decided with reference to principles of 
English law. Those principles may be stated thus : "When conditions are 
prescribed by statute for the conduct of any particular business or pro- 
fession, and such conditions are not observed, agreements made in the course 
of such business or profession are void if it appears by the context that the 
object of the Legislature in imposing the condition was the maintenance of 
public order or safety or the protection of the persons dealing with those 
on whom the condition is imposed ; but they are valid if no specific penalty 
is attached to the specific transaction, and if it appears that the condition 
was imposed for merely administrative purposes, e.g., the convenient collec- 
tion of the revenue (/). Following these principles, it has been held that 
an agreement by a lessee of tolls from Government under the Bombay Tolls 
Act, 1875, to sublet the tolls (t/), or an agreement by a lessee of a ferry 
under the Madras Ferries Act, 1890, to subrent the ferry (h), is valid and 
binding between the parties, though the sublease may have been given 
without the permission of the Collector, as required by the terms of the 
lease. These Acts, which are intended solely for the protection of revenue, 
must be distinguished from Abkari and Opium Acts, which have for their 
object the protection of the public as well as the revenue. Thus an agree- 
ment to sublet a licence to sell arrack issued under the Madras Abkari 
Act, 1886 ('), or a licence to manufacture and sell country liquor granted 
under the N.-W. P. Excise Act, 1887 (&), or a licence to sell opium issued 
under the Opium Act, 1878 (/), is illegal and void, the sublease in each 
case being prohibited on pain of a fine, and no suit will lie to recover any 
money due under such an agreement. The result is the same where the 
holder of such a licence does not actually sublet or transfer the licence, but 
does an act which amounts to a sublease or a transfer, as where he sells his 
business in an excisable article in consideration of a money payment with 
leave to the purchaser to carry on the business in his name, and obtains an 
indemnity from the purchaser against all loss, claims, and demands in 
respect of the business. In such a case he cannot recover from the 
purchaser either the consideration money or payments made by him 

(e) See Pollock on Contract, 298. (i) Thlthi Pakitrudasu v. Sheemvdu 

(/) 2b. p. 296. (1902) 26 Mad. 430. 

(0) Shikanbhai v. Hiralal (1900) 24 (It) Dell Prasad v. Ruj) Ham (1888) 

Bom. 622. 10 All. 577. 

(A) Abdulla v. Mammod (1902) 20 (I) Raghunath v. Natliu Ilirji (1894 

Mad. 156. 19 Bom. C26. 



STATUTORY PROHIBITIONS. 119 

for debts contracted by the purchaser in the business and covered by S. 23. 
the indemnity (m). Similarly, a partnership agreement entered into in 
violation of the terms of a licence granted under the Bombay Abkari Act, 
1877, which prohibited the licensee from admitting any partner in the 
business on pain of a fine, is void as forbidden by law (ri) ; and if a person, 
being aware of this prohibition, does join as a partner, and advances capital 
for that purpose, he cannot recover back the amount advanced (0). And 
where a rule framed under the Madras Abkari Act, 1886, prohibited 
the holder of a licence for the sale of toddy from being interested in the 
sale of arrack and the holder of a licence for the sale of arrack from being 
interested in the sale of toddy, it was held that an agreement of partnership 
in the business of selling arrack and toddy entered into between a holder 
of a licence for the sale of toddy and the holder of a licence for the sale of 
arrack was void, and that neither party could sue the other for the recovery 
of money due to him in respect of the partnership (p~). Upon the same 
principles it has been held that an agreement for the sale of fermented 
liquor by a person who had not obtained a licence as required by the 
Bengal Excise Act, 1878, is illegal and void, and that no suit will lie 
at the instance of such a person to recover the price of liquor sold 
by him (q). 

Agreements to assign or sublet licences granted under the excise 
laws must be distinguished from agreements to sublet a contract with a 
public department. Thus in a Bombay case (r] the defendant contracted 
with the Executive Engineer of the Public Works Department to supply 
materials for the construction of a public road. One of the conditions of 
the contract was that no work was to be underlet by the contractor without 
the express permission in writing of the Executive Engineer or his duly 
authorised agent. Subsequently the defendant, without obtaining the 
requisite permission, entered into an agreement with the plaintiff under 
which the plaintiff was to do the contract work, and the defendant to pay 
him all the moneys that might be received by him from the Executive 
Engineer under the contract after deducting 10 per cent, as the defendant's 

(m) Behari Loll v. Jagodish Chundei- Bishesliar Das v. Goi'ind Rain (190G) 

(1904) 31 Cal. 798. Punj. Rec. no. 114. 

(n) ITormasfi v. Pestanji (1887) 12 (o) Gopalrav v. Kallappa (1901) 3 

Bom. 422. In a recent Punjab case it Bom. L. R. 164. 

was held that a partnership agreement by (p) Marudamuthu v. Rangasami (1900) 

a licensee under the Excise Act XII of 24 Mad. 401. 

1896, which applies in Northern India, (#) Boistub Churn v. Woo ma Chitnl 

Burma, and Coorg, was not void under (1889) 16 Cal. 436. 

this section, as it did not contravene any (r) Gangu&har v. Davwdur (1896) 21 

of the rules framed under that Act : Bom. 522. 



!0 THE INDIAN CONTRACT ACT. 

S. 23. profit. It did not appear that the plaintiff knew of the condition against 
underletting contained in the contract. The plaintiff sued the defendant 
for the balance of money due to him under the agreement. It was held 
that, as the plaintiff did not appear to have any knowledge of the restrictive 
condition in the contract, he was entitled to enforce his own contract 
against the defendant. The Court did not consider it necessary to decide 
whether the sub-contract was void as opposed to public policy, at the same 
time intimating its opinion that the sub-contract was to be distinguished 
from the subletting of a licence granted under the excise laws and 
intended by the Legislature for the use of the licensee only. It was further 
held that, even if the plaintiff could not enforce his contract, he was at all 
events entitled under the circumstances to receive from the defendant 
compensation for the work and labour of which the defendant had received 
the benefit. 

"Defeat the provisions of any law." The term "law" in this 
expression would seem to include any enactment or rule of law for the 
time being in force in British India. This branch of the subject may thus 
be considered under three heads according as the object or consideration of 
an agreement is such as would defeat (1) the provisions of any legislative 
enactment, or (2) the rules of Hindu law, or (3) other rules of law for the 
time being in force in British India. 

1. Legislative Enactments. Where a lessee of a village from a 
zamindar agreed to collect from the ryots and pay over to the zamindar an 
annual festival cess up to that time recovered by the zamindar, it was held 
that the zamindar could not recover from the lessee the amount of the cess 
collected by him, the cess being of a nature prohibited by the Bengal Rent 
Recovery Act X of 1859, s. 10 (s). And where the manager of a temple 
at Broach sued the defendant to establish the right of the temple to levy a 
cess on cotton purchased in Broach and exported from it, it was held that, 
assuming that the defendant impliedly assented to pay the cess, the agree- 
ment was unlawful as being against the provisions of the Bombay Town 
Duties Act XIX of 1844, which abolished cesses of every kind not forming 
part of the land revenue (t). Similarly where A. was required under the 
Code of Criminal Procedure (u~) to furnish a surety for his good behaviour, 
and B. agreed to become a surety on condition that A. would deposit with 
him the sum in which he was required to go bail, and the deposit was made, 
it was held, in a suit brought after the expiry of the period of suretyship, 
that A. was not entitled to recover the deposit from B., as the effect of the 

00 Kumala Kant Ghose v. Kalu raj v. Robb (1884) 8 Bom. 398. 
MalwmeA (18G9) 3 B. L. R. A. C. 44. () Then Act X of 1872, s. 50:>, now 

(t) Goxcami S/tr'i Purusltotamji JItiJta- Act V of 1898 s. 107. 



OBJECT FORBIDDEN BY LAW. 121 

agreement was to defeat the provisions of the Code by rendering B. a surety S. 23. 
only in name (x). Likewise, a surety who has given a bail for an accused 
person cannot recover from the accused the bail which has been forfeited in 
consequence of the accused failing to appear when required by the Court 
which released him on bail (y). And it is conceived that a suit will not lie 
to recover the amount of a loan by a British subject to a native prince in 
India without the consent of the Government, such loans being prohibited 
by the East India Company's Act, 1797 (37 Geo. III. c. 142, s. 28). But 
where an agreement is merely " void " as distinguished from "illegal," e.g., 
an agreement to give time to a judgment debtor without the sanction of the 
Court (z), either party may, on performing his part of the contract, enforce 
the contract as against the other (a). 

The provisions of the Insolvent Debtors Act afford further illustrations 
of the class of agreements now under consideration. Thus an agreement 
by which an insolvent who has obtained his personal, but not his final, 
discharge settles the claim of one creditor without notice to the official 
assignee or his other creditors, and by which that creditor agrees not to 
oppose his final discharge, is void as in fraud of the creditors and as incon- 
sistent with the policy of that Act(#). Similarly a promissory note whereby 
a creditor secures for himself a larger payment from an insolvent than what 
he is entitled to under a composition deed is void where the other creditors 
are not aware of the arrangement. The same principle applies even though 
the note may have been passed to the creditor by a third party if it is done 
with the insolvent's knowledge (c). And it has been recently held by the 
High Court of Bombay that a composition deed whereby a debtor assigned 
the whole of his property to trustees for the benefit of such of his creditors 
as should sign the deed within a certain period is void as against the official 
assignee (W). On like grounds a collusive assignment of a contract by a party 
thereto on the eve of his insolvency to his brother-in-law with the object 
of defrauding his creditors is void under this section and s. (2), cl. (h), of 
the Transfer of Property Act, 1882 (e), as the effect of such an assignment 

(#) Fateh Singh v. Sanwal Singh (1878) (V) Naoroji v. Kazl Si-dick Mlrza 

1 All. 751. (1896) 20 Bom. G36. 

(y) Sunder Singh v. Kixlu'n Ckand (c) Krishnappa Chetti v. Adimitla 

(1899) Punj. Rec. no. 1. Mudall (1896) 20 Mad. 8-t ; Mahamad v. 

(z) Such an agreement was declared to Parameswara (1906) 16 Mad. L. J. 418. 

be void under the Code of Civil Procedure, ((T) Manmohandas v. N. C. Macleod 

1882, s. 257A. That section has now been (1902) 26 Bom. 765. 

omitted in the Code of Civil Procedure, (e) Clause (/t) of s. 6 of the Transfer of 

1908. Property Act provides that no transfer 

() Bank of Bengal v. Vyubhoy (1891) can be made for an unlawful object or 

16 Bom. 618. See also Abttjl v. Trimlalt consideration within the meaning of s. 23 

(1903) 28 Bom. 06, 73. of the Contract Act. 



122 THE INDIAN CONTRACT ACT. 

S. 23. is to defeat the provisions of the Insolvency Act by preventing the benefit 
of the contract from vesting in the official assignee (/). 

A mortgage of immovable property belonging to a minor by a person 
holding a certificate of administration in respect of the estate of the minor 
under the Bengal Act XL of 1858 (g) is void where it is made without 
the sanction of the Court, even though the mortgage money was advanced 
to liquidate ancestral debts and to save an ancestral property from sale in 
the execution of a decree (h). Where a specific kind of land or specific 
rights in land have been declared by the Legislature to be not transferable, 
a transfer of such land or rights in land is void, as to permit it would be to 
defeat the provisions of the law within the meaning of the section (i). Thus 
a sale by occupancy tenants of occupancy rights is void, it being of such 
a nature that if permitted it would defeat the provisions of the N.-W. P. 
Rent Act (7c). Similarly an agreement to transfer the rights of an ex-pro- 
prietary tenant in a mahal is illegal, as it would defeat the provisions of the 
N.-W. P. Rent Act XII of 1881, s. 7 (m). But there is nothing in the 
provisions of the latter Act to render an assignment by a lambardar of 
the profits of a mahal unlawful under this section (n). A usufructuary 
mortgage of an occupancy holding by an occupancy tenant is void under 
this section, for, if permitted, it would defeat the provisions of the Agra 
Tenancy Act II of 1901, s. 21 (0). And where a specific individual has 
been declared under an Act to be incompetent to transfer land belonging 
to him, a transfer of his land by that person is void under this section, and 
such a transfer cannot be enforced even after removal of the disability (p). 
But a stipulation for payment of compound interest, though not allowed by 
the Regulations in force in the Santhal Parganas (q), is not unlawful within 
the meaning of the present section (r). Nor is an alienation made pending 

(/) Jaffer Meher All v. Budge Budge (/) Kashi Prasad v. Kedar Nath Sahu 

Jute Mills Co. (1907) 34 Cal. 289, in appeal (1897) 20 All. 219. 

from (1906) 33 Cal. 702. () Chadma Lai v. KisJien Lai (1894) 

(#) Repealed by the Guardian and All. W. N. 17 ; BJiagwan Das v. Bliajju 

Wards Act VIII of 1890, of which see Mai (1894) AH. W. N. 140. 

ss. 29 and 30. (<>) Earn Samp v. Khlian Lai (1907) 

(It) Chlmman Singh v. Subran Kuar All. W. N. 76. 

(1880) 2 All. 902. (p) Radha Bai v. Eamod Singh (1908) 

(0 Phalli v. Matabadal (1883) All. 30 All. 38 (a case under Jhansi Incum- 

W. N. 7 (a case under N.-W. P. Rent Act bered Estates Act XVI of 1882, s. 8, 

XII of 1881, s. 9, relating to occupancy relating to disqualified zamindars). 

rights) ; Indar v. Khushll (1886) All. (q) Regulation III. of 1872, s. 6, and 

W. N. 88 (a case under N.-W. P. Revenue Regulation V. of 1893, s. 24. 

Act XIX of 1873, s. 125, relating to sir (r) Shama Charan v. Chuni Lai (1898) 

land). 26 Cal. 238. 
(&) Jhhigvri v. Durga (1885) 7 All. 878. 



OBJECT FORBIDDEN BY LAW. 123 

a temporary injunction under s. 492 of the Civil Procedure Code [now 0. 39, S. 23. 
r. 1] unlawful under this section (s). A loan by a military officer to a man 
under his command is not unlawful as being against the law, though such 
a loan may be against the rules of discipline (t). A compromise of a suit 
whereby the defendant agrees to a mortgage decree being passed against him 
even in respect of a claim not secured by a mortgage is not unlawful or 
opposed to public policy (u). There is nothing in the Bengal Drainage 
Acts (x) to render invalid a contract between a landlord and his tenant by 
which the latter agrees to pay the former drainage cost in respect of land 
on which rent has for the first time been imposed, in consequence of a 
scheme of works carried out under the Acts benefiting it (y). 

2. Rules of Hindu and Mahomedan. law. An agreement that would 
defeat the provisions of Hindu law would be unlawful within the meaning 
of the present clause. A contract to give a son in adoption in considera- 
tion of an annual allowance to the natural parents is an instance of this 
class, and a suit will not lie to recover any allowance on such a contract, 
though the adoption may have been performed. The Hindu law does not 
recognise in this kali yug any adoption but that of a dattak son, and such a 
son is defined in the Dattaka Chandrika (s. 1, par. 12) as a son " affectionately 
given by his father or mother." Besides defeating the provisions of the 
Hindu law, such an agreement would involve an injury to the person and 
property of the adopted son, " inasmuch as, if it could be proved that the 
boy was purchased and not given, it is very probable that the adoption 
would be set aside, and if such adoption were set aside he would not only 
lose his status in the family of his adopting father, but also lose his right 
of inheritance to his natural parents " (z). And it has been held by the 
High Court of Bengal (a) that a contract entered into by Hindus living in 
Assam, by which it is agreed that, in the event of the husband leaving the 
village in which the wife and her friends resided, the marriage was to 
become null and void, is " contrary to the policy of the law " (ft), and to 
the " policy and spirit of the Hindu law " (c). Again, it is a rule of Hindu 
law that for the fulfilment of the duties which the law imposes upon a wife 
she must reside with her husband wherever he may choose to reside. An 

(*) Manohar Das v. Earn Antar (1903) (y] Jyoti Kumar v. Sari Das (1905) 

25 All. 431. 32 Gal. 1019. 

(0 Ana Singh v. Sadda Singh (1873) (?) Ethan Kishor v. Haris Chandra 

Punj. Rec. no. 16. (1874) 13 B. L. R. App. 42. 

(u) BhumnagiriSultlarayndu v.Mara- (a) Sitaran v. Mussamut Ahferce 

dugula Venltataratnam (1907) 17 Mad. Heeralinee (1873) 11 B. L. R. 129. 

L. J. 200. (b) Ib., per Couch, C. J., at p. 134. 

(x) Act VI of 1880 and Act II of (c) Ib., per Kemp, J., at p. 135. 
1902. 



124 THE INDIAN CONTRACT ACT. 

S. 23. agreement, therefore, by a Hindu husband that he will not be at liberty to 
remove his wife from her parents' abode to his own abode is illegal, as, if 
permitted, it would defeat the rule of Hindu law on the subject. Such an 
agreement is, besides, opposed to public policy. An agreement of this kind 
is no defence to a suit by the husband for the restitution of conjugal rights 
against his wife, and for a decree directing her to live with him at 
his house (d). An agreement entered into before marriage between a 
Mahomedan wife and husband by which it is provided that the wife 
should be at liberty to live with her parents after marriage is also void, 
and does not afford an answer to a suit for restitution of conjugal rights (e). 
Similarly, an agreement entered into after marriage between a Mahomedan 
wife and husband who were for some time prior to the agreement living sepa- 
rate from each other, providing that they should resume cohabitation, but that 
if the wife should be unable to agree with the husband she should be free to 
leave him, is void, and does not constitute a defence to the husband's suit for 
restitution of conjugal rights (/). But an agreement between a Mahomedan 
wife and husband entered into before marriage by which it is provided that 
the wife should be at liberty to divorce herself from her husband under 
certain specified conditions is valid, if the conditions are of a reasonable 
nature and are not opposed to the policy of the Mahomedan law. Whec 
such an agreement is made, the wife may, on the happening of the con- 
tingencies, repudiate herself in the exercise of the power, and a divorce will 
then take effect as if the taldq had been pronounced by the husband. This 
is known in Mahomedan law as taldq (divorce by the husband) by tafwtz 
(delegation), the wife being, as it were, delegated by the husband to pro- 
nounce the taldq (g). But an ante-nuptial agreement between a Hindu 
husband and wife enabling the wife to avoid the marriage if the husband 
married an additional wife, or did not treat her kindly, or asked her to live 
at place D. instead of place B., is void, such an arrangement being repugnant 
to the spirit of the Hindu law (fi). A karnavan of a tarwad cannot part by 
contract, so as to be unable to resume them, with the privileges and duties 
which attach to his position as Tcamavan(i). Such an agreement is 
invalid on the principle that " there can be no renunciation of rights and 
consequent destruction of relative duties prescribed by an absolute law " (k). 

(d) Tekalt Mon Mohlni Jemadai v. (g~) Hamidoolla v. Fuizunmsm (1882) 
Easanta Kumar Singh (1901) 28 Gal. 8 Gal. 327. 

751 ; Lahoran Sheikh Nabbi v. Jtladar (/<) Chait Ram v. Mit.t.^i in unit Ntitlii 

Baksh (1878) Punj. Eec. no. 20. (1900) Punj. Rec. no. 15. 

(e) Abdul v. Hmseribi (1904) 6 Bom. (/) Cherukomen v. Istmala (1871) 6 
L. E. 728. M. H. C. 145. 

(/) Meherallyv. Sakerkhanoobai (1905) (//,) Ib., per Holloway, J. at p. 150. 

7 Bom. L. R. 602. 



OTHER RULES OF LAW IN FORCE IN BRITISH INDIA. 125 

3. Other rules of law in force in British India. It is now a settled s. 23. 
principle of law that where a decree is silent as to subsequent interest on the 
amount decreed, interest cannot be recovered by proceedings in execution of 
the decree (/). But an agreement in the nature of a compromise between 
a decree -holder and a judgment-debtor, which proceeds upon ignorance 
common to both parties thereto as to the above principle, is not illegal as 
defeating the provisions of that law (m). Again, it is a well-established 
rule of law that, unless a will is proved in some form, no grant of probate 
can be made merely on the consent of parties. Hence an agreement or 
compromise as regards the genuineness and due execution of a will, if its 
effect is to exclude evidence in proof of the will, is not lawful so as to be 
enforceable under the provisions of s. 375 of the Civil Procedure Code [now 
0. 23, r. 3] (n). Similarly, a receiver being an officer of the Court, the 
Court alone is to determine his remuneration, and the parties cannot by 
any act of theirs add to, or derogate from, the functions of the Court 
without its authority (0). A promise, therefore, to pay the salary of a 
receiver without leave from the Court, even if unconditional, being in con- 
travention of the law, is not binding on the promisor (j?). But an agreement 
providing for remuneration to be paid to an executor not out of the assets 
of the testator, but from the pocket of a third person, is neither forbidden by 
the Administrator-General's Act, 1874, s. 56, nor is it one which if permitted 
would defeat the provisions of that Act, nor is it against public policy (<?). 

" Fraudulent-" A sale of immovable property pending a suit against 
the vendors to recover a debt is not invalid merely because the motive of 
the vendors may have been to prevent the land from being attached and 
sold in execution. In such a case the only question is whether the sale was 
a real transfer of the title to the land for a fair money consideration. The 
motive of the vendors to defeat the execution of any decree that may be 
passed against them is immaterial (r). In this connection may be noted 
the provisions of s. 53 of the Transfer of Property Act IV of 1882. That 
section provides infer alia that " every transfer of immovable property 
made with intent to defeat or delay the creditors of the transferor is 
voidable at the option of any person so defeated or delayed," but that 

(Z) Filial v. Plllai (1875) 15 B. L. E. (q) Narayan Coomari Debi v. Shajanl 

383, L. K. 2 Ind. Ap. 219. Kanta Ckatterjee (1894) 22 Cal. 14. 

(m) Seth Goliul Bass v. Mut-ll (1878) (>) Pullen Chetty v. Ramalinga Chetty 

3 Cal. 602. (1870) 5 M. H. C. 368, referring to 

(n) Monmohlnl Gu/ia v. Banga Chandra Sanliarappa v. Kamayya (1866) 3 M. H. 

Das (1903) 31 Cal. 357. C. 231, and Gnanabliai v. Srinlmsa 

00 See Civil Procedure Code, s. 503. Plllai (1868) 4 M. H. C. 84. See also 

(p) Prohash Chandra v. Adlam (1903) liajan Harjl v. Ardeshir Horniusji (1879) 

30 Cal. 696. 4 Bom. 70. 



126 THE INDIAN CONTRACT ACT. 

S. 23. " nothing in this section contained shall impair the rights of any transferee 
in good faith and for consideration." Such a transfer is not illegal, for the 
section merely declares that it shall be voidable at the option of the party 
affected by the transfer. Where the object of an agreement between 
A. and B. was to obtain a contract from the Commissariat Depart- 
ment for the benefit of both, which could not be obtained for both 
of them without practising fraud on the Department, it was held that 
the object of the agreement was fraudulent, and that the agreement 
was therefore void(s). But an agreement between A. and B. to purchase 
property at an auction sale jointly, and not to bid against each other, is 
perfectly lawful (/). 

" Injury to the person or property of another." The consideration 
or object of an agreement is unlawful when it involves or implies 
injury to the person or property of another. A mortgage- bond, whereby 
a person who is entitled to a moiety only of certain property mortgages 
the whole of that property, is not void under this section as to the 
moiety belonging to him, merely because he purports to mortgage the 
other moiety also not belonging to him (u). For an instance of agree- 
ment void under this head, see the adoption case cited in the notes to 
this section under the head " Rules of Hindu and Mahomedan Law," 
p. 123, above. 

" Immoral." A landlord cannot recover the rent of lodgings knowingly 

let to a prostitute who carries^on her vocation there (a;). Otherwise, if the 

lajTgJQj-d did notjkjipjyjbat the lodgings were required for prostitution (y). 

Similarly, money lent to a prostitute expressly to enable her to carry on her 

. trade cannot be recovered (z). On like grounds, ornaments lent by a brothel- 

II keeper to a prostitute for attracting men and encouraging prostitution 

1 1 cannot be recovered back (a). An assignment of a mortgage to a woman 

for future cohabitation is void, and it can be set aside at the instance of 

the assignor, though partial effect may have been given to the illegal 

(x) Sahib Ham v. Nagar Mai (1884) no. 22. 

Punj. Rec. no. 63. (z) Bholl Baltsh v. Gtdia (1876) Punj. 

(f) Nanda Singh v. Sunder Singh Rec. no. 64. 

(1901) Punj. Rec. no. 37. Quls negarit ? (a) Alia Baltsh v. Churiia, (1877) Punj. 

() Joffo Mohen Deb v. Davdoong Rec. no. 26. A similar English case is 

Bin-man (1908) 12 C. W. N. 94. Pearce v. JBnwks (1866) L. R. 1 Ex. 213 

(;f) GaurinathMooTierjee\.Madhumani (goods sold to a prostitute known by the 

PeshaJtar (1872) 9 B. L. R. App. 37 ; seller to be such, and to want the goods 

Pirthi Mai v. Mussammat Bhagan (1898) " for the purpose of enabling her to make 

Purij. Rec. no. 2 ; Brinltman v. Abdul a display favourable to her immoral 

Ghafur (1904) Punj. Rec. no. 65. purposes"). 

(y) Sultan v. Nanu (1877) Punj. Rec. 



IMMORAL OBJECT. 127 

consideration (b). And it has been held that money paid by a wife to a S. 23. 
third person to be given as a bribe to a gaoler for procuring the release of 
her husband from gaol could not be recovered back on failure of such 
person to procure the release (c). Similarly, where the plaintiff advanced 
moneys to the defendant, a married woman, to enable her to obtain a 
divorce from her husband, and the defendant agreed to marry him as soon 
as she could obtain a divorce, it was held that the plaintiff was not entitled 
to recover back the amount, as the agreement had for its object the divorce 
of the defendant from her husband, and the promise of marriage given 
under such circumstances was contra bonos mores (d). An agreement to 
pay money upon the consideration that the plaintiff would give evidence in 
a civil suit on behalf of the defendant cannot be enforced. Such an agree- 
ment may be for giving true evidence, and then there is no consideration, 
for " the performance of a legal duty is no consideration for a promise " ; 
or it may be for giving favourable evidence either true or false, and then 
the consideration is vicious (e). There is nothing in this decision, or in 
the reasons for it, to invalidate an expert's claim for services rendered in 
the way of professional investigation, though he may afterwards become a 
witness for his employer in a litigation arising out of the same facts. 

Under the Common Law of England, and presumably under any 
monogamous law of marriage in a jurisdiction where promises of marriage 
are actionable, an agreement between a married man and a woman who 
knows him to be married to marry one another after the wife's death is 
void as being contrary to morality and public policy (/). 

We shall next turn to cases of agreements not held to be immoral. A 
loan made for the purpose of teaching singing to naikins (dancing girls) 
has nothing immoral in its object, for although it might be true that most 
of the naikins who sing lead a loose life, singing is a distinct mode of 
obtaining a livelihood, not necessarily connected with prostitution (g). And 

(5) Thasi Muthukannu v. Shunmu- (/) Wilson v. Carnley [1908] 1 K. B. 

gavelu (1905) 28 Mad. 413. See also 729, C. A., confirming Spiers v. Hunt, ib. 

Alice Mary Hill v. William Clark (1905) 720. It seems to be still good law that a 

27 All. 266, and Mussammat Roshun v. promise of marriage made by a person 

Muhammad (1887) Punj. Eec. no. 46. who is married and conceals the fact from 

All these cases are quite plain on the the promisee is actionable at the suit of 

principles of English law. the innocent promisee on the ground of 

(6-) Protima Aurat v. Dukhia SlrTtar the promisor's implied warranty that he 

(1872) 9 B. L. K. App. 38. can lawfully make and perform the 

(d) Bai Vijli v. Nansa Nagar (1885) promise : Millward v. Littlewood (1850) 
10 Bom. 152 ; Mussammat Roshun v. 5 Ex. 775, 82 E. R. 871. This, however, 
Muhammad (1887) Punj. Rec. no. 46. may be of little importance in India. 

(e) Sashamiah Chetti v. Ramasamy (#) Khubchand v. Seram (1888) 13 
Chetty (1868) 4 M. H. C. 7. Bom. 150. 



128 THE INDIAN CONTRACT ACT. 

S. 23. it has been held by the High Court of Allahabad that a suit will lie for 
arrears of allowance agreed to be paid to a woman for past cohabitation (k}. 
The Court observed : " Such a consideration, if consideration it can properly 
be called, which seems to us more than doubtful, would not be immoral so 
as to render the contract de facto void, but we think the more correct view 
is to regard the promise to pay the allowance as an undertaking on the 
part of Bikramajit Singh to compensate the woman for past services 
voluntarily rendered to him for which no consideration as defined in the 
Contract Act would be necessary." It would seem that the High Court 
thought the case was covered by s. 25 (2) of the Act, though the section is 
not specially referred to. But it is submitted that a consideration which 
is immoral at the time, and, therefore, would not support an immediate 
promise to pay for it, does not become innocent by being past. The 
English view of such cases is that the alleged consideration is bad simply 
as being a past consideration not within any of the exceptional rules (so 
far as such exceptions really exist) allowing past consideration, under 
certain conditions, to be good. In a recent case the same High Court held 
that, adultery in India being an offence against the criminal law, cohabita- 
tion past or future, if adulterous, is not merely an immoral but an illegal 
consideration ('). In an old Madras case (k), the tenants of certain villages 
engaged the services of the defendant to advocate their cause with regard 
to assessments made upon the villages, and agreed to pay to him a sum of 
money subscribed amongst themselves if he succeeded in obtaining a more 
favourable assessment. A portion of the subscription amount was paid to 
him in advance, and it was agreed that if he failed in his work he should 
repay the amount. In a suit to recover the amount paid to the defendant 
on the ground that he had failed to perform his part of the contract, it was 
held that the plaintiffs were entitled to succeed, and that the agreement 
was not vitiated by illegality. The Court observed : " The point, then, for 
consideration is, Did the defendant for that purpose undertake, in con- 
sideration of the stipulated sum, to induce by corrupt or illegal means, or 
by the exercise of personal influence, any public servant to do an official act 
or show any favour ? If he did not, the contract cannot be treated as 
illegal ; and we are of opinion that the written agreement does not properly 
admit of such a construction." Here the principle was applied (p. 115, 

(h) Dhiraj Kuar v. Bikramajit Singh decide whether the view taken in those 

(1881) 3 All. 787. See also Man Kuar v. cases was correct, he did not express any 

Jasodha Kuar (1877) 1 All. 478. Both dissent from it. 

these cases were referred to in Lakshnri- (/') Alice Mary Hill v. William Clark 

narayana v. Siibhadrl Animal (1903) 13 (1905) 27 All. 266. 

Mad. L. J., where Bhashyam Aiyangar, J., (A) Pichaltutty Mudall v. Naraya 

said that though it was not necessary to HUVJM (1864) 2 M. H. C. 243. 



AGREEMENTS AGAINST PUBLIC POLICY. 129 

above) that, where it is possible to perform an agreement by lawful means S. 23. 
according to its terms, an unlawful intention will not be presumed, and 
any party alleging such an intention must prove it. 

" Opposed to public policy." The general head of public policy 
covers, in English law, a wide range of topics. Agreements may offend 
against public policy by tending to the prejudice of the State in time of 
war (trading with enemies, etc.), by tending to the perversion or abuse of 
municipal justice (stifling prosecutions, champerty and maintenance), or, 
in private life, by attempting to impose inconvenient and unreasonable 
restrictions on the free choice of individuals in marriage, or their liberty to 
exercise any lawful trade or calling. Some of these matters are separately 
dealt with in the Contract Act (see ss. 26 and 27, below). It is now under- 
stood that the doctrine of public policy will not be extended beyond the 
classes of cases already covered by it. No Court can invent a new head 
of public policy (?) ; it has even been said in the House of Lords that 
" public policy is always an unsafe and treacherous ground for legal 
decision " (m). This does- not affect the application of the doctrine of 
public policy to new cases within its recognised bounds (n). 

1. Trading with enemy. Agreements alleged to amount to trading 
with an enemy, or otherwise to operate in the enemy's favour, in time of 
war, do not appear to have come before the Courts of British India. Here 
it may suffice to say that all trade with public enemies without licence of 
the Crown is unlawful. " The King's subjects cannot trade with an alien 
enemy, i.e., a person owing allegiance to a Government at war with the King, 
without the King's licence " (0). This includes shipping a cargo from an 
enemy's port even in a neutral vessel (p). As a consequence of this, " no 
action can be maintained against an insurer of an enemy's goods or ships 
against capture by the British Government " (q). If the performance of a 
contract made in time of peace is rendered unlawful by the outbreak of 
war, the obligation of the contract is suspended or dissolved according as 
the intention of the parties can or cannot be substantially carried out by 
postponing the performance till the end of hostilities (r). In such a case 

(7) Lord Halsbury, Janson v. Dricfon- fontein Consolidated Mines [1902] A. C. 

tein Consolidated Mines [1902] A. C. 484, at p. 499. 

491. O) Potts v. Bell (1800) 8 T. R. 548, 5 

O) Lord Davey [1902] A. C.at p. 500 ; R. R. 452 ; Esposito v. Bmoden (1857) 7 

Lord Lindley at p. 507, in very similar E. & B. 763. 

words, cited in Govind v. Pacheco (1902) (j) Lord Macnaghten, Janson v. Drie- 

4 Bom. L. R. 948. fontein Consolidated Mines [1902] A. C. 

() See Wilson v. Carnley, p. 127, at p. 499. 

above. () Esposito v. Bowden (1857) 7 E. & 

() Lord Macnaghten, Janson v. Drie- B. 763. 

i.e. 9 



130 THE INDIAN CONTRACT ACT. 

S. 23. a contracting party is not bound to perform a part of his undertaking which 
remains possible and lawful in itself, but would be useless without the 
rest (s). 

The rules under this head become applicable only when an actual state 
of war exists. They cannot be made to relate back to a time before the war, 
though war may have been apprehended. A contract of insurance made 
before war cannot be vitiated, as regards a loss by seizure also before any 
act of public hostility, by the fact that war did break out shortly 
afterwards (t). 

2. Stifling prosecution. Agreements for stifling prosecutions are a 
well-known class of those which the Courts refuse to enforce on this ground. 
The principle is " that you shall not make a trade of a felony" (u). In 
England the compromise of any public offence is illegal. If the accused 
person is " innocent, the law [is] abused for the purpose of extortion ; if 
guilty, the law [is] eluded by a corrupt compromise screening the criminal 
for a bribe " (x). It is not necessary to prove that there was any express 
threat of prosecution if the transaction in fact amounted to a bargain not 
to prosecute, and if the Court thinks the defence of illegality a disreputable 
one to raise in the circumstances, the only way in which it can give effect 
to its opinion is in dealing with the costs (y). But the English common 
law rule, that contracts for the compounding or suppression of criminal 
charges for offences of a public nature are illegal and void, has no applica- 
tion to a contract for compounding the prosecution of criminal proceedings 
for an offence against the municipal law of a foreign country and committed 
there, if such a contract is permitted by the law of that country, and this 
whether the contract is entered into there or in British territory. A suit 
will, therefore, lie in British India on a bond passed to the plaintiff in 
consideration of his withdrawing a prosecution for theft instituted in the 
French Court at Pondicherry, the agreement being permissible by the 
French law (z). It would be difficult, indeed, to hold that the compromise 



() Geipel v. Smith (1872) L. R. 7 (1867) 4 M. H. C. 14. Reference was 

Q. B. 404. made in the course of the judgment to 

(f) Janson v. Drlefontein Consolidated the rule of private international law that 

Mines [1902] A. C. 484. "the law of the place of a contract" 

(u) Lord Westbury, Williams v. Bayley governs its validity. That expression, 

(1866) L. R. 1 H. L. 200, 220. however, is ambiguous. The local law 

(x) Keir v. Leeman (1844) 6 Q. B. 308, governing the substance of a contract 

9 Q. B. 371, 392 ; Windhill Local Board may, according to the circumstances, be 

v. Vint (1890) 45 Ch. Div. 357. that of the place where it was made, or of 

(y) Jones v. Merionethshire Building that where it is to be performed; and 

Society [1892] 1 Ch. 178, C. A. these are only auxiliary tests for ascer- 

(z) Subraya Pillai v. Sulraya Mudali taining the intention of the parties as to 



STIFLING PROSECUTION. 



131 



of a French lawsuit in a manner allowed by French law could be injurious 
to the administration of justice in British India. 

A compromise of proceedings which are criminal only in form, and 
involve only private rights, may be lawful (a). This perhaps is of no 
importance in Indian practice, where we have a statutory list of com- 
poundable offences (b). " The criminal law of this country makes a differ- 
ence between various classes of offences. With regard to some, it allows 
the parties to come to an agreement and either not to take proceedings or 
to drop the proceedings after institution in a few instances even without 
the leave of the Court, and, in other instances, with the leave of the Court. 
But there are other instances which cannot be compounded or arranged 
between the parties. If the offence [is] compoundable and [can] be 
settled in or out of Court without the leave of ~the Court, there seems no 
reason why [a compromise] should be regarded as forbidden by law or as; 
against public policy, the policy of the criminal procedure being to allow' 
such a compromise in such cases " (c). Thus where A. agreed to execute a 
kabala of certain lands in favour of B. in consideration of B. abstaining 
from taking criminal proceedings against A. with respect to an offence of 
simple assault which is compoundable, it was held that the contract was 
not against public policy and that the same could be enforced (d). So a 
promise to pay a sum of money as compensation for the abduction of a 
woman is enforceable, provided the abduction does not constitute a non- 
compoundable offence (e). Likewise, money paid to compromise a charge 
of adultery may be recovered back, if the party to whom the money is paid 
proceeds with the prosecution of the charge, adultery being a compoundable 
offence (/). But where the plaintiffs agreed to relinquish their right to a 
religious office in favour of the defendant in consideration of the latter 
withdrawing a charge of criminal trespass preferred against them, it was 
stated by Innes, J., that the agreement was illegal, as it " would amount to 
the stifling of a criminal prosecution for an offence which the law does not 
permit to be compounded." The case was, however, treated as one of 



S. 23. 



what law is to prevail : Hamlyn fy Co. v. 
Talisker Distillery [1894] A. C. 202; 
Dicey, Conflict of Laws, 529, 565, 2nd ed. 
Kaufman v. Gerson [1904J 1 K. B. 591, 
C. A., looks at first sight contra; but the 
Court seems to have been influenced by 
peculiar facts, and it is far from clear 
that the decision was intended to lay 
down any general rule of law. And see 
p. 10, above. 

() Fisher 4' Co. v. Apollinaris Co. 
(1875) L. K. 10 Ch. 297, as qualified by 



Windhill Local Board v. Vint (1890) 45 
Ch. Div. 351. 

( b) See s. 345, Criminal Procedure Code, 
1898 ; see also Penal Code, ss. 213, 214. 

(a) Per Cur. Amir Khan v. Amir Jan, 
(1898) 3 C. W. N. 5. 

(d) Ibid. 

(e) Shah Rahman v. Ismail Khan (1904) 
Punj. Eec. no. 82. 

(/) Hosein Shah v. Nur Ahmed (1875) 
Punj. Rec. no. 81. 

92 



132 THE INDIAN CONTRACT ACT. 

S. 23. " coercion," the charge of trespass being false, and the sole cause for enter- 
ing into the agreement being " the well-founded terror of the influence of 
the prosecutor and of the civil death which would probably result from his 
proceedings " (g). In Kessowji v. Hurjivan (h) it was held that a guarantee 
for the payment to creditors of debts due to them in consideration of the 
creditors abstaining from taking criminal proceedings against the debtor is 
void, as being against public policy. But it must be noted, as observed in 
that case, that " a man to whom a civil debt is due may take securities for 
that debt from his debtor, even though the debt arises out of a criminal 
offence, and he threatens to prosecute for that offence, provided he does 
not, in consideration of such security, agree not to prosecute, and such an 
agreement will not be inferred from the creditor's using strong language. 
He must not, however, by stifling a prosecution, obtain a guarantee for his 
debt from third parties." Following this principle, it has been held that 
where a bond fide debt exists and where the transactions between the parties 
involve a civil liability as well as possibly a criminal act, a promissory note 
given by the debtor and a third party as security for the debt is not void 
under this section ('). As a suit will not lie on an agreement to stifle a 
prosecution, so an agreement of this class will not avail as a defence to a 
suit. Thus, where in a suit for damages for wrongful arrest and confine- 
ment the defendant pleaded an agreement under which the plaintiff was to 
give up all claims against the defendant for his arrest and confinement in 
consideration of the defendant withdrawing charges of criminal trespass 
and being a member of an unlawful assembly preferred against the plaintiff, 
it was held that, the latter offence being non-compoundable, the agreement 
could not be set up as an answer to the suit (&). But the mere fact that 
A. makes an agreement with B., who intends, by means of something to be 
obtained or done under it, to effect an unlawful or immoral purpose, will 
not render the agreement illegal unless A. knows of that purpose. Thus, 
if B. sells his house to A. for the purpose of raising money to be given to 
certain third persons as a bribe to induce them to withdraw a charge of 
criminal breach of trust which they had preferred against B., the sale is 
not illegal unless it be proved that A. was aware of the unlawful object (/). 
3. "Champerty and Maintenance." The practices forbidden under 
these names by English law (partly by old statutes which it is needless to 

(g) Pudishary Krishnenv. Karampally (1906) Punj. Rec. no. 9. 
Knnlntnni (1874) 7 M. H. C. 378. (It) Dalsukhram v. Charles de Brett on 

(//) (1887) 11 Bom. 566. See also (1904) 28 Bom. 326. 

Gobardhan Dan v. Jai Klshen Das (1900) (I) Rajltrixto Moitro v. Koylash Cltunder 

22 All. 224, 230. (1881) 8 Cal. 24, citing Pollock on Con- 

(0 Jai Kumar v. Gauri Nath (1906) tract, p. 342, 2nd ed. (397, 7th eel.). 
28 All. 718 ; Nanak Chand v. Durant 



CHAMPERTY AND MAINTENANCE. 133 

specify here, and which are said to be only in affirmance of the common S. 23. 
law) may be summarily described as the promotion of litigation in which 
one has no interest of one's own. Maintenance is the more general term ; 
champerty, which in fact is the subject of almost all the modern cases, 
is in its essence " a bargain whereby the one party is to assist the other in 
recovering property, and is to share in the proceeds of the action " (m). 
Agreements of this kind are equally illegal a.nd void whether the assist- 
ance () to be furnished consist of money, or, it seems, of professional 
assistance, or both (0). They are in practice often found to be also dis- 
putable on the ground of fraud or undue influence as between the 
parties (p ). 

There is no rule of law to forbid the purchase of property of which 
the title is or may be disputed, but the law does not, therefore, sanction 
mere speculative traffic in rights of action (-). To which class a given 
transaction belongs, in a case where doubt is at first sight possible, seems 
to be a question of fact rather than of law. 

The specific rules of English law against maintenance and champerty u 
have not been adopted in British India (f) ; neither are substantially ' 
similar rules applicable in any other way (s) ; but the principle, so far as 
it rests on general grounds of policy, is regarded as part of the law of 
" justice, equity, and good conscience " to which the decisions of the 
Court should conform. The leading judgment to this effect is in Fischer v. 
Kamala Naiclcer (), an appeal from the Sudder Dewanny Adawlut, Madras. 
There the Judicial Committee observed : " The Court seem very properly 
to have considered that the champerty, or, more properly, the maintenance, 
into which they were inquiring, was something which must have the 
qualities attributed to champerty or maintenance by the English law ; it 

() Hutley v. Hutley (1873) L. R. 8 damages are or were freely assignable ; 

Q. B. 112, per Blackburn, J., and see per see L. Q. R. ix. 97. 

Cbitty, J., Guy v. Churchill (1888) 40 (?) Ckedambara Chetty v. Renja 

Ch. D. at p. 488. Krishna (1874) L. R. 1 Ind. Ap. 241, 13 B. 

() There must be something more than L. R. 509; Ram Coomar Coondoo v. 

simply communicating information : Rees Chunder Canto Mookerjee (1876) L. R. 4 

v. De Bernardy [1896] 2 Ch. 437, 446. Ind. Ap. 23, 2 Cal. 233. 

(0) Stanley v. Jones (1831) 7 Bing. 369, (*) Bhagwat Dayal Singh v. Debt 

33 R. R. 513, may be considered the Dayal Sahu (1907) 35 Cal. 420, L. R. 35 

leading modern case ; Re Attorneys and Ind. Ap. 48, 56. 

Solicitors Act (1875) 1 Ch. D. 573. (t) (1860) 8 M. I. A. 170, where it was 

(p) E.g. Rees v. De Bernardy [1895] stated that an assignment by an agent to 

2 Ch. 437. his principal of his interest in an agree- 

(if) See the Transfer of Property Act, ment entered into in his name, but on 

1882, s. 6 (e). By the customs of the behalf of the principal, was not cham- 

Kachins, a tribe on the north-east fron- pertous. 
tier of Burma, claims for unliquidated 



134 



THK INDIAN CONTRACT ACT. 



S. 23. must be something against good policy and justice, something tending to 
promote unnecessary litigation, something that in a legal sense is immoral, 
and to the constitution of which a bad motive in the same sense is 
necessary " (u). Adverting to these observations in a later case (#), the 
same Committee said : " It is unnecessary now to say whether the above 
considerations are essential ingredients to constitute the statutable offence 
of champerty in England ; but they have been properly regarded in India 
as an authoritative guide to direct the judgment of the Court in determining 
the binding nature of such agreements there." In Bhagtvat Dayal Singh v. 
Debi Dayal Sahu (y), which is the latest Privy Council decision on the 
subject, their Lordships clearly laid it down that an agreement champertous 
according to English law was not necessarily void in India ; it must be 
against public policy to render it void here. A present transfer of 
property for consideration by a person who claims it as against another in 
possession thereof, but who has not yet established his title thereto, is not 
for that reason opposed to public policy (z). Nor is it opposed to public 
policy merely because the payment of the major part of the consideration 
is made to depend on the transferee's success in the suit to be brought by 
i him to recover the property (a). Similarly agreements to share the 
I subject of litigation if recovered in consideration of supplying funds to 
* carry it on are not in themselves opposed to public policy (>). " A fair 
agreement to supply funds to carry on a suit in consideration of having a 
share of the property if recovered ought not to be regarded as being per se 
opposed to public policy. Indeed, cases may be easily supposed in which 
it would be in furtherance of right and justice and necessary to resist 
oppression that a suitor who had a just title to property and no means 
except the property itself should be assisted in this manner. But agree- 
ments of this kind ought to be carefully watched, and when found to be 
extortionate and unconscionable so as to be inequitable against the party, 
or to be made, not with the bond fide object of assisting a claim believed 
to be just and of obtaining a reasonable recompense therefor, but for 
improper objects, as for the purpose of gambling in litigation or of 
injuring or oppressing others by abetting and encouraging unrighteous 
suits so as to be contrary to public policy, effect ought not to be given to 



00 8 M. I. A. p. 187. 

(x) Ram Coomar Coondoo v. Ckunder 
Canto Mookerjee (1876) 2 Cal. 233, L. R. 4 
Ind. Ap. 23. 

(y) (1908) 35 Cal. 420, L. R. 35 Ind. 
Ap. 48. 

(z] Achal Ram v.JCazhii Husaut. Khun 



(1905) 27 All. 271, L. R. 32 Ind. Ap. 113, 
as explained in Bhagwat Dayal Singh v. 
Debi Dayal Sahu, supra. 

(a) Bhagivat Dayal Singh v. Debi 
Dayal Sahu, suj>ra. 

(b~) Kumoar Ram Lai v. j\il KantJu 
(1893) L. R. 20 Ind. Ap. 112. 



CHAMPERTY AND MAINTENANCE. 135 

them " (c). But though the Courts will not give effect to agreements "got S. &3. 
up for the purpose merely of spoil or of litigation," they may in a proper 
case award compensation for legitimate expenses incurred by the lender to 
enable the borrower to carry on the lawsuit (rf). Thus where, in con- 
sideration of the plaintiff agreeing to defray the expenses of prosecuting 
the defendant's suit to recover a certain property, the defendant agreed to 
transfer to the plaintiff, in one case nine annas share of the property (0), 
in another two annas share (/), and in a third eight annas share (g], it 
was held that the agreement was extortionate and inequitable, and the 
plaintiff was awarded the expens38 legitimately incurred by him with 
interest. But mere inadequacy of consideration is not of itself sufficient to 
render a transaction champertous (h). An agreement for the purchase of 
a property pendente lite which entitled the purchaser to cancel the agree- 
ment in the event of the suit being decided against the vendor so as to 
leave the vendor no interest in the property is not champertous (*'). 
Similarly an assignment for a second time by the mortgagor of his equity 
of redemption previously assigned to another by an unregistered document 
is not champertous, though the transaction may be one not commendable 
in conscience (&). A sale for Rs. 50 of property worth Rs. 150 which the 
vendor had previously transferred by way of gift to another person is not 
champertous (I). And where a patnidar, having a claim against the 
defendant for Rs. 13,099, sold fourteen annas share of his claim to 
another for Rs. 4,000, it was held in a suit by the patnidar and his 
assignee to recover Rs. 13,099 from the defendant that the sale was not 

(c) Ram Coomar Coondoo v. Chunder Singh (1893) L. R. 20 Ind. Ap. 127, 15 All. 

Canto Moolterjee (1876) L. K. 4 Ind. Ap. 23, 352, in appeal from Chunni Kuar v. Rup 

2 Cal. 233. The point actually decided was Singh (1888) 11 All. 57. 

that a suit cannot lie at the instance of (g) Husain JSakhsh v. Rahmat Husain 

a successful defendant in a former suit (1888) 11 All. 128. See also Harival- 

to recover the costs of that suit from a abhdas v. Bhai Jivanji (1902) 26 Bom. 

party who advanced funds for the prosecu- 689. 

tion of the suit to the plaintiff therein, (h) Gurusami v. Subbaraya (1888) 12 

even though the advances may have been Mad. 118 ; Siva Ramayya v. Ellamma 

made under an agreement champertous (1899) 22 Mad. 310. 

and unconscionable in its nature, and (i) Ahmedbhoy Hubibhoy v. Vulleebhoy 

though that party was the real actor and Cassumbhoy (1884) 8 Bom. 323, 333, 334. 

had an interest in that suit. (k) Gopal Ramehandra v. Gangaram 

(ff) Kunwar Ram Lai v. Nil Kanth (1889) 14 Bom. 72, followed by the High 

(1893) L. R. 20 Ind. Ap. 112 ; Dhallu v. Court of Madras in the case of a similar 

Jiwan Singh (1894) Punj. Rec. no. 79 ; transaction in Ramanuja v. Narayana 

Stewart v. Ram Chand (1906) Punj. Rec. (1895) 18 Mad. 374. 

no. 26. (1} Sira Ramayya v. Ellamma (1899) 

(e) Ibid. 22 Mad. 310. 

(/) Raja Mohltam Singh v. Raja Rup 



136 THE INDIAN CONTRACT ACT. 

S. 23. champertous (in). But where the liquidator of a company compromised a 
claim of the company amounting to Rs. 161,500 for a tenth part of its 
amount on the representation of the debtor's friends that he could not pay 
more, and after about ten years assigned the same claim to a third person 
who was neither a creditor nor shareholder of the company, but a complete 
outsider as regards all matters connected with the company, it was held 
in a suit brought by the assignee to have the compromise declared void on 
the ground of fraud that the suit was not maintainable, as the assignment 
was effected with a view to litigation, and was, therefore, champertous in 
its nature (n). Sargent, J., said : " The case is, therefore, the simple one 
of a stranger officiously interfering for reasons of his own, and in no way 
at the request or even suggestion of the company or liquidator, in a matter 
in which he has no connection whatever, with the sole object of enabling 
himself to dispute transactions which occurred ten years ago, and in 
which, independently of the assignment of those claims, he has no interest 
whatever, so far at least as appears on the plaint." In a recent Privy 
Council case, A. claimed to be entitled to a taluq by succession, of which 
B. had entered into possession. Not having money to establish his title 
to the taluq by suit, A. sold a moiety of the taluq to R. for Rs. 150,000. 
In the sale deed it was stated that a lac of rupees had been paid down 
by R. and that the balance of Rs. 50,000 was to remain on deposit with 
R. to be expended in prosecuting the proposed suit and in paying Rs. 50 
every month to A. and Rs. 20 to his mukhtar. A suit was then brought 
by A. and R. as co-plaintiffs against B. A. afterwards compromised with 
B., and withdrew from the suit. Then arose the question whether R. 
could sue alone, and it was held that he could. It was contended on 
behalf of B. that the statement in the sale deed that one lac had been paid 
to A. was not true, and that the sale to R. was void as being champertous. 
Their Lordships, after observing that the statement as to the payment of 
one lac was not in accordance with the fact, said : " Of course, at the first 
blush, the untrue statement throws suspicion upon the whole transaction. 
But after all, so long as the deed stands, it is no concern of [B.] that 
[A.] may have a grievance against [R.] on the score of a misstatement in 
an instrument to which [B.] is no party. [A.] himself has taken no steps 
to impeach the deed. On the contrary, in the course of the two years 
that elapsed between the date of the deed and the institution of the suit, 
[A.] more than once affirmed the transaction. . . . Apart from the 
untrue recital in the sale deed there seems to be no flaw in the transaction. 

(HI) Abdool Hakim v. Dourga Proshad (n) Goculdas v. Lalthmidas (1879) 3 

(1879) 5 Cal. 4. See also Taracliand v. Bom. 402. 
(1888) 12 Bom. 559. 



CHAMPERTY AND MAINTENANCE. 137 

Without assistance [A.] could not have prosecuted his claim. There was S. 23. 
nothing extortionate or unreasonable in the terms of the bargain. There 
was no gambling in litigation. There was nothing contrary to public 
policy. Their Lordships agree with the judgment of the Court of the 
Judicial Commissioner that the transaction was a present transfer by [A.] 
of one moiety of his interest in the estate, giving a good title to [R.] on 
which it was competent for him to sue " (<?). In Raja Rai Bhagtvat Dayal 
Singh v. Debi Dayal Sahu (p ), which is the latest Privy Council case on 
the subject, a Hindu widow sold to one X. certain properties which she 
had inherited from her son. The sale, it was alleged, was without legal 
necessity. On the death of the widow the reversioners who were refused 
possession by X. executed a sale deed in favour of one R. by which they 
purported to sell their rights in the properties, which were worth 
Rs. 300,000, to R. for Rs. 52,600, of which, however, only Rs. 600 was 
paid down, the balance being left on deposit with R. "on this condition, 
that the vendors should get the whole of the consideration in case the 
whole of the property should be recovered, and, in the event of recovery 
of a portion of the property sold, a portion of the consideration money in 
proportion thereto." In a suit by R. against X. for possession of the 
property, it was held by the High Court of Calcutta that the sale was 
void as being champertous, that no title passed to R., and that he was 
not therefore entitled to maintain the suit (q). On appeal it was held by 
the Judicial Committee that though the agreement was of a generally 
champertous character, it was not void on that account, nor was it opposed 
to public policy and void by reason of the stipulation relating to the 
payment of the consideration. As to X.'s contention that the assignment 
by the reversioners to R. was unfair and unconscionable, it was held that, 
X. not being a party to the assignment, it was not open to him to 
question the transaction on that ground. In the course of the judgment 
their Lordships said : " For the respondents it was boldly argued 
that, although the English law as to maintenance and champerty 
is not, as such, applicable to India, yet on other grounds what is 
substantially the same law is there in force. Their Lordships are of 
opinion that that proposition cannot be supported. In three cases, Ram 
Coomar Coondoo v. Chunder Canto Mooleerjee (r), Kumvar Ram Lalv. Nil 
Kanth (s), Lai Achal Ram v. Raja Karim Husain Klian (t\ before this 

(o) Aclial Ram v. Kazim Husain Klian Bliau Pertap (1903) 8 C. W. N. 408. 

(1905) 27 All. 271, L. R. 32 Ind. Ap. 113. (V) (1876) 2 Cal. 233, L. R. 4 Ind. Ap. 23. 

(p) (1908) 35 Cal. 420, L. R. 35 Ind. (.) (1893) L. R. 20 Ind. Ap. 112. 

Ap. 48. (t) (1900) 27 All. 271, L. R. 32 Ind. Ap. 

(;/) See Deli Doyal Sahoo \. Thakurai 113, 9 C. W. N. 477. 



138 



THE INDIAN CONTRACT ACT. 



S. 23. Board, a contrary doctrine has been laid down. In the last of those cases 
fall effect was given, under circumstances closely analogous to those of the 
present case, to an agreement which would certainly have been void if 
champerty avoided transactions in India. 

" It was further argued that the transaction in question was contrary 
to public policy and void on that ground, by reason of the provision as 
to payment of the purchase-money by the first appellant to the second 
and third. The purchase-money was fixed at Us. 52,600, of which 
Rs. 600 was to be paid down, and the balance when the property should 
be recovered. Their Lordships are unable to agree to this argument. 
In their opinion the condition so introduced does not carry the case any 
further than does the champertous character of the transaction generally. 

" It was further said, and this was relied upon in the Courts of India, 
that the transaction was an unfair and unconscionable bargain for an 
inadequate price. But that is a question between assignor and assignee. 
It is unnecessary to consider what the decision ought to have been if this 
had been a litigation between the assignors and the assignee in which 
the former sought to repudiate the assignment. In the present case 
the assignors do nothing of the kind. They maintain the transaction 
and ask that effect be given to it, and for that purpose they join as 
plaintiffs in the present action. Their Lordships are therefore of opinion 
that the attack upon the title of the first appellant upon any such grounds 
as those indicated must fail." 

Agreements between legal practitioners subject to the Legal Prac- 
titioners Act, 1879, and their clients making the remuneration of the legal 
% practitioner dependent to any extent whatever on the result of the case in 
which he is retained are illegal as being opposed to public policy (u). 

4. Interference with course of justice. Various agreements not open 
to objection on the ground of champerty, nor always obviously wrong in 
themselves, have been held void as attempting to interfere with the 
powers and discretion of the regular Courts in administering justice. So 
much of this doctrine as it was thought proper to preserve in British 
India will be found in s. 28, below. 

5. Marriage brocage contracts. Agreements to procure marriages 
for reward (.r) are undoubtedly void by the common law, on the ground 
that marriage ought to proceed, if not from mutual affection, at least from 
the free and deliberate decision of the parties with an unbiassed view to 



O) Ganga Ram v. Devi Das (1907) 
Punj. Rec. no. 61. 

(x) Whether general or specific : Her- 
matin v. Charlesworth [1905] 2 K. B. 



123, C. A., reversing the judgment of a 
Divisional Court who had held that only 
agreements to procure marriages with 
specified persons were illegal. 



MARRIAGE BROCAGE CONTRACTS. 139 

their welfare. In England, however, this topic is all but obsolete. It is S. 23. 
nearly a century since any case of the kind, except the recent one cited 
in the last note, has been reported in England or Ireland. But such 
questions have come before Indian Courts in several modern cases, with 
not quite uniform results. In all those cases, it will be observed, the 
parties to the suit have been Hindus, a community in which the consent 
of the marrying parties has rarely, if ever, anything to do with the 
marriage contract, which is generally arranged by the parents or friends 
of the parties before they themselves are of an age to give a free and 
intelligent consent (y). The consent of parties, therefore, not being an 
essential condition in the Hindu marriage contract, it has been held by 
the High Court of Calcutta that an agreement by A. to give his minor 
sister or daughter in marriage to B. in consideration of a sum of money 
to be paid by him to A. is not against public policy. Therefore, if A. 
gives the girl in marriage, he is entitled to require B. to pay the promised 
amount (z) ; and conversely if any advance is made by B. on the faith of 
A.'s promise, and A. gives the girl in marriage to another in breach of 
the contract, B. may recover from A. the amount paid to him (a). 
Similarly it was held by the High Court of Madras in a case in which the 
parties were Brahmans, and the marriage was in the Asura form (#), that 
the object of an agreement whereby defendant promised to pay money to 
plaintiff for giving his daughter in marriage is not unlawful (c). The 
decision proceeded mainly on the ground that the Asura form of marriage 
was still recognised as a valid form, and that though there might be cases 
in which such contracts might be held illegal as opposed to public policy, 
e.g., for the payment of money as a consideration for the marriage of very 
young children to old and debauched men, there was nothing in that case 
to lead the Court to that conclusion. Following the principle of the 

(y) Cp. Punhotamdas Tribhoeandas v. W. R. 154 ; Ram Chand Sen v. Audaito 

Purshotamdas Mangaldas (1896) 21 Bom. Sen (1884) 10 Cal. 1054. 

23, where it is laid down that the contract (*) Of the eight forms of marriage 

for the marriage of Hindu children under described in Manu, the Brahma and the 

Hindu law is made exclusively by the Asura alone survive. The Brahma is one 

parents. It is settled (following the of the four approved forms, and the Asura 

analogy of English law) that specific per- is one of the four disapproved (Mayne on 

formance of a Hindu parent's or guardian's Hindu Law and Usage, 80). The 

contract to give him a child in marriage characteristic of the Asura form is the 

will not be granted ; the only remedy is payment of money by the bridegroom to 

in damages. See Re Gunput Narain those who give the bride away (Strange's 

Singh (1875) 1 Cal. 74. Hindu Law, 5th ed. p. 30). 

(c) Ranee Lallitn Munee Doxxee v. (0 Vixvanathan v. Saminathan (1889) 

Xobi Moltun Singh (1876) 25 W. K. 32. 13 Mad. 83. 

(a) Juggessw v. Panchcowree(\&10') 14 



140 THE INDIAN CONTRACT ACT. 

S. 23. above decision, the High Court of Allahabad held, in a case where the 
parents of a girl gave her in marriage to an ineligible husband, because 
the husband promised to pay them a certain sum monthly for their 
maintenance, that the agreement was void as opposed to public policy (d). 
The Court refused, like the Madras Court in the case cited above, to go 
the length of the Bombay decisions (see below) and to hold that every 
agreement in this country in which some payment was agreed to be paid 
to the parents of the bride or the bridegroom was void, and observed 
that each case must be judged by its own circumstances. "Where the 
parents of the girl are not selling her welfare, but give her to a husband, 
otherwise ineligible, in consideration of a benefit secured to themselves, an 
agreement by which such benefit is secured is, in our opinion, opposed to 
public policy and ought not to be enforced " (e). No such limitation has 
been recognised by the High Court of Bombay. The latter Court appears 
to have rigidly followed the rule of the English common law in all the 
cases which came before it. Thus where a Lovana, who was excom- 
municated from the caste, promised to pay Es. 5,000 to the head of the 
caste for the purchase of utensils for the caste if he got him married to a 
Lovana girl, and the marriage was brought about as agreed, it was held 
in a suit to recover the balance of the stipulated sum that the agreement 
was against public policy and should not be enforced (/). And the same 
was held in a case where the plaintiff sued the defendant to recover 
Rs. 2,500 agreed to be paid to the plaintiff for giving in marriage to the 
defendant a girl alleged to have been left in her charge by her mother (g). 
And it has been recently held by the same Court that an agreement which 
entitled the father of a bridegroom to receive on the marriage of his son 
a certain amount as peheramni from the father of the bride is as much 
against public policy as where the payment is to be made to the father or 
guardian of a girl (A). In the course of the judgment it was stated that, 
though the Asura form of marriage when actually performed may be 
recognised as valid, it does not follow that an agreement for such a 
marriage would be legally enforced, and that though the money, if actually 



(d) Baldeo Sahai v. Jumna Kuinmar public policy in the presentation of orna- 
(1901) 23 All. 495. meats by the brother of a bridegroom to 

(e) Ibid., p. 497. the bride, and a suit will lie for restora- 
(/) Pitamber v. Jagjivan (1884) 13 tion of the ornaments if the father of the 

Bom. 131. See note (#), p. 138, above. bride, in breach of the contract, gives 

(0) Dulari v. Vallabhdus Praffji (1888) away the girl in marriage to another : 

13 Bom. 126. Rambhat v. Tunmayya (1892) 16 Bom. 

(//) Dholidas v. Fulcluind (1897) 22 673. 

Bom. 658. There is nothing against 



MARRIAGE BROCAGE CONTRACTS. 141 

paid to the father in consideration of the marriage, cannot be recovered S. 23. 

back when once the marriage is solemnised, it by no means follows that 

a suit to recover the money, where it has not been paid, would lie. 

The Punjab decisions are much to the same effect. The Punjab Chief 

Court has held that agreements to pay money to parents or guardians of 

children in consideration of marriage are opposed to public policy, as they 

amount to a sale of children. Thus an agreement by a Hindu to pay a 

sum of money to B. in consideration of B. giving his daughter in marriage 

to A.'s nephew was held to be void ('). But it has been held by the same 

Court that a family arrangement of intermarriages of sons and daughters 

of various families known as bil maivaza amongst persons of the same 

class, by which the family A. gives a girl to be taken as a wife on equal 

terms into a family B., and a girl of the family B. is at the same time 

given as a wife into family A., stands on a totally different footing from 

what is really a sale of the girl, and is not therefore void as opposed to 

public policy. Where a girl, therefore, of family A. is given as a wife in 

family B. in virtue of such an arrangement, but family B, refuses to give a 

boy of the family as a husband in family A., a suit will lie for damages 

for breach of the contract. But since such arrangements are not held in. 

highest repute, the Court will not award heavy damages (&). 

It will be observed that, so far as authority is in favour of these 
contracts, it is confined to cases where the marriage takes place between 
Hindus in the Asura form, and the circumstances are not such as to 
amount to a sale of the girl in marriage. The ground assigned is that 
the stipulation to pay money in consideration of giving a girl in marriage 
is in conformity with the Asura form of marriage, and that though, 
according to the ancient books, it is an unapproved form, marriages 
celebrated in that form are as valid as those performed in the Brahma 
form. Granting, however, that payments made on the occasion of such 
marriages to the parents or guardians of the bride are consistent with the 
usage of Hindus, it may still be arguable whether our Courts should 
enforce agreements for such payment where the payment has not actually 
been made. The mere fact that such marriages are legal according to 
Hindu law, and that payment of bride-price is in accordance with custom, 
is not a conclusive ground for enforcing an agreement providing for such 
a payment. The fact that Asura marriage is, according to the ancient 
books, not "approved," though lawful, would rather seem to point to the 
agreement not being enforceable. Where the parties themselves, being 

(/) Wazarimal v. Ballia (1889) Punj. Nathv. (1880) Punj. Rec. no. llfi. 
Rec. no. 128 ; Hi-ra v. Bhandari (1892) (/O Amir Chand v. Ram (1903) Punj. 
Punj Rec. no. 112; Kundan Lai v. Rec. no. 50. 



142 THE INDIAN CONTRACT ACT. 

S. 23. children, have no choice of their own, this may be thought to make it not 
a less, but a more, necessary part of sound legal policy to withhold legal 
sanction from bargains tending to give the parents or guardians a pecuniary 
interest of their own at variance with their duty of making the best 
possible choice in the interest of their children. Indeed, it might be 
doubted on principle, and on the analogy of the old common law of 
England, whether transactions so essentially religious as Hindu betrothal 
and marriage ought to be the subject of civil jurisdiction at all ; but it is 
probably too late for the Courts to go back upon this more general 
question. However this may be, the opinion of the Bombay High Court 
in Dholidas v. Fulchand (kk) seems the better one on the point now under 
consideration. 

There is this feature common to all cases cited above except the 
Lovana's case, that the agreement was to make a payment to the parents 
or guardians of the minors. Where the agreement is by a person to pay 
money to a stranger hired to procure a wife for him, it seems clear that 
it is opposed to public policy, and will not be enforced by any of the 
Indian Courts. In fact, the High Court of Madras has held, distinguishing 
the above cases, that such an agreement cannot be enforced (/). 

6. Agreements tending to create interest against duty. One of the 
reasons suggested for not enforcing agreements to reward parents for 
giving their children in marriage is that such agreements tend to a 
conflict of interest with duty. The same principle is applied by the 
common law to dealings of agents and other persons in similar fiduciary 
positions with third persons. An agent must not deal in the matter of the 
agency on his own account without his principal's knowledge. In the 
present Act the rules on this head are embodied in the chapter on 
Agency (m\ and will accordingly be considered in that place. Certain 
rules which we shall find in the chapter on Indemnity and Guarantee (n) 
rest on similar grounds of equity. 

"Where a Kanungo, who is not allowed by the departmental rules 
to purchase property in his own district on pain of dismissal from 
Government service, purchases it in the name of a third person, neither he 
nor his representatives can recover the property from that person, the 
object of the purchase being unlawful as opposed to public policy (0). 

7. Sale of public offices. Traffic by way of sale in public offices and 
appointments obviously tends to the prejudice of the public service by 

(M) (1897) 22 Bom. 658. See p. 140, (/) Ss. 215, 216. 

abov e. () Ss. 133137. 

(0 Valtliyanathan v. Gangarazu (o) Sheo Narain v. Mat a Prasad 

(1893 17 Mad. 9. (1904) 27 All. 73. 



SALE OF PUBLIC OFFICES. 143 

interfering with the selection of the best qualified persons ; and such sales S. 23. 

are forbidden in England by various statutes said to be in affirmance of the 

common law (p). There are no recent English authorities. The cases in 

India on this branch of the subject have arisen principally in connection 

with religious offices. It has been held by the High Court of Madras that 

the sale of the office of a sebait is invalid (q). The High Court of Bombay, 

while affirming the invalidity of an alienation of the office to a stranger, 

upholds an alienation made in favour of a member of the founder's family 

standing in the line of succession (r). Similarly the office of mutivali of a 

ivalcf is not transferable (s). And it has been held by the Privy Council 

that a custom allowing the sale of the office of waller (trustee) of a Hindu 

temple for the pecuniary advantage of the trustee, even if it was established, 

would be bad in law (t\ These decisions are based upon the principle that 

the interest of the public might suffer if bargains relating to public offices 

are upheld, as their effect is to prevent such offices being filled by the best 

available persons. Where, however, the claimants to the office of cjha 

(high-priest) of the temple of Baidyanath were members of a family group, 

and one claimed the office on the ground that it was elective, and the other 

that it was hereditary, it was held by the High Court of Calcutta that a 

compromise by which one of the claimants relinquished his claim in favour 

of the other in consideration of the latter paying Rs. 2,400 annually out of 

the charao offerings to the idol was not in any way against public policy () 

(see Transfer of Property Act, 1882, s. 6 (f) ). 

An agreement to pay money to a public servant to induce him to retire 
and thus make way for the appointment of the promisor is virtually a 
trafficking with reference to an office, and is void under this section. In 
the language of the English law, such an agreement is an office brocage 
agreement invalid as opposed to public policy (x) (see illustration (f) 
to the section, p. 113, above). 

8. Agreements tending to create monopolies. Agreements having 



(/;) See Pollock, Contract, 328, 7th ed. 6 Bom. 298. 

The statute 49 Geo. III. c. 126, s. 3, is still (#) Wahid All v. Asliruff Hossain 

in force in the Presidency towns. 1882) 8 Gal. 732. 

(<tf) Narasimma v. Anantha Shatta (t) Rajah Vurmah Valla v. Ravi 

(1881) 4 Mad. 391 ; Kuppa Gurukal v. Vurmah Kunhi (1876) 1 Mad. 235. The 

Dora Sami (1882) 6 Mad. 76. See also proper name of the office seems to be 

Rajah Vurmah v. Ravi Vurmah (1876) uralan (Wilson's Glossary). 

1 Mad. 235, L. R. 4 Ind. Ap. 76 ; Guana- (u) Glrijanund v. Sailajaimnd (1896) 

sambanda Pandara Sannadhi v. Vein 23 Gal. 645. 

Pandaram (1900) 23 Mad. 271, L. R. 27 (a?) Saminatha v. Mutfntsanti (1907) 

Ind. Ap. 69. 30 Mad. 530. 

(r) Mancharam v. Pransharikar (1882) 



144 THE INDIAN CONTRACT ACT. 

S. 23. for their object the creation of monopolies are void as opposed to public 
policy (y). 

Waiver of illegality. Agreements which seek to waive an illegality 
are void on grounds of public policy (z). " Whenever an illegality 
appears, whether from the evidence given by one side or the other, the 
disclosure is fatal to the case. A stipulation of the strongest form to 
waive the objection would be tainted with the vice of the original contract 
and void for the same reasons. Wherever the contamination reaches, it 
destroys " (a). 

Pleadings. The facts showing illegality must be pleaded, but when 
the illegality appears from the plaintiff's own evidence, or is otherwise 
duly brought to the notice of the Court, it is the duty of the Court 
to give effect to the fact thus brought to its notice, and to give judg- 
ment for the defendant, although the illegality is not raised by the 
pleadings (&). See Code of Civil Procedure, 0. 6, r. 8, and 0. 8, r. 2. 

Other statutory provisions of similar effect : 1 . 2'rust Act. The 
provisions of this section as to agreements are strengthened or supple- 
mented by some other enactments. The Indian Trusts Act II of 1882 
provides by s. 3 that all expressions used therein, and defined in the 
Contract Act, shall be deemed to have the meanings respectively attributed 
to them by the Contract Act. S. 4 provides that a trust may be created 
for any lawful purpose, and that the purpose of a trust is lawful unless it 
is (a) forbidden by law, or (b) is of such a nature that, if permitted, it 
would defeat the provisions of any law, or (c) is fraudulent, or (d) involves 
or implies injury to the person or property of another, or (e) the Court 
regards it as immoral or opposed to public policy. The section further 
enacts that every trust of which the purpose is unlawful is void. 

2. Transfer of Property Ad IV of 1882. S. 6 (h) of this Act provides 
that no transfer can be made of property of any kind for an "illegal 
purpose." 

3. Indian Evidence Act I of 1872. Where the consideration or object 
of an agreement is alleged to be unlawful, oral evidence may be adduced to 
prove the same, though the agreement is reduced to the form of a document 
(s. 92, proviso 1). 

4. Specific Relief Act I of 1877. S. 35 provides that any person 
interested in a contract in tvriUng may sue to have it rescinded, and such 



(y) Somu Plllai v. The Municipal (a) Per Field, J. (Supreme Court, U.S.), 

Council, Mayavaram (1905) 28 Mad. 520. in Oscanyan v. WincJiester, 13 Otto, 261 ; 

(z) DKanuMhari v. Nathima (1907) Hall v. Capell, 7 Wallace, 542. 

11 C. W. N. 848 ; La Banque v. La (V) Alice Mary Hill v. William Clarke 

Banque (1887) 13 App. Ca. 111. (1905) 27 All. 266. 



VOID AGREEMENTS. 145 

rescission may be adjudged by the Court,"(b) where the contract is unlawful Ss. 23, 24. 
for causes not apparent on its face, and the defendant is more to blame 
than the plaintiff." This is explained by the following illustration : " A., 
an attorney, induces his client, B., a Hindu widow, to transfer property to 
him for the purpose of defrauding B.'s creditors. Here the parties are not 
equally in fault, and B. is entitled to have the instrument of transfer 
rescinded." It will be noted that the illustration gives the case of a convey- 
ance. It is clear that B. would be equally entitled to rescind if the matter 
had rested in a contract only to convey the property to A. This enactment 
is independent of the possible application of s. 65 of the present Act as to 
the recovery back of money paid, etc., under void agreements, which will 
be considered in its place. 

Void Agreements. 

24. If any part of a single consideration for one or 
Agreements void, ie objects, or any one or any part of any 
an^objSunkw- one of . several considerations for a single 
fui m part. object, is unlawful, the agreement is void. 

Illustration. 

A. promises to superintend, on behalf of B., a legal manufacture 
of indigo, and an illegal traffic in other articles. B. promises to pay 
to A. a salary of 10,000 rupees a year. The agreement is void, the 
object of A.'s promise, and the consideration for B.'s promise, being in 
part unlawful. 

Entire or divisible agreements. This section is an obvious con- 
sequence of the general principle of s. 23. A promise made for an unlawful 
consideration cannot be enforced, and there is not any promise for a lawful 
consideration if there is anything illegal in a consideration which must be 
taken as a whole. On the other hand, it is well settled that if several 
distinct promises are made for one and the same lawful consideration, and 
one or more of them be such as the law will not enforce, that will not of 
itself prevent the rest from being enforceable. The test is whether a 
distinct consideration which is wholly lawful can be found for the promise 
called in question. " The general rule is that, where you cannot sever the 
illegal from the legal part of a covenant, the contract is altogether void ; 
but where you can sever them, whether the illegality be created by statute 
or by the common law, you may reject the bad part and retain the good " (c). 
Further specific reference to English cases where the rule has been 
recognised would be of no practical use for Indian purposes. 

In Bengal an agreement between a zamindar and his tenant for the 

(c) Willes, J., in Pickering v. llfracombe R, Co. (1868) L. R. 3 C. P. at p. 250. 

i.o. 10 



= 6 THE INDIAN CONTRACT ACT. 

S. 24. payment of an enhanced rent which exceeds the rent previously paid by 
the tenant by more than two annas in the rupee has been held void (d), as 
it directly contravenes the provisions of the Bengal Tenancy Act VIII of 
1865. The Court will not in such a case sever the good part from the 
bad, and pass a decree for the good part, that is for so much of the enhanced 
rent as does not exceed the two annas in the rupee (). To do so would be 
to create a new agreement between the parties. Similarly, where a part of 
a consideration for an agreement was the withdrawal of a pending criminal 
charge of trespass and theft, it was held that the whole agreement was 
void (/). Upon the same principle a suit will not lie upon a promissory 
note for an amount which included an item in respect of lotteries prohibited by 
law (g). Where A. promised to pay Rs. 50 per month to a married woman, 
B., in consideration of B. living in adultery with A. and acting as his 
housekeeper, it was held that the whole agreement was void, and B. could 
not recover anything even for services rendered to A. as housekeeper (h). 
Where, in consideration of A. agreeing to procure a divorce from her 
husband and marrying B., B. advanced to A. Rs. 300, of which part was 
alleged by B. to have been' paid for expenses of procuring the divorce and 
part for A.'s ornaments, it was held that on A.'s failure to perform the con- 
tract B. was not entitled to recover from A. any part of the money 
advanced ('). Similarly, a suit will not lie to recover money advanced as 
capital for the purposes of a partnership which is partly illegal : A. holds a 
licence for the sale of opium and ganja. The ganja licence contains a con- 
dition prohibiting A. from admitting partners into theganfa business without 
the permission of the Collector. No such condition is embodied in the opium 
licence. B., who is aware of the prohibition, enters into a partnership 
agreement with A. both in the opium and ganja business without the leave 
of the Collector, and pays A. Rs. 500 as his share of the capital. Disputes 
arise between A. and B., and B. sues A. for dissolution of partnership and 
for a refund of his Rs. 500. B. is not entitled to recover Rs. 500 or any 
part thereof, one of the objects of the agreement being to carry on ganja 
business in partnership. In such a case " it is impossible to separate the 
contract or to say how much capital was advanced for the opium and how 
much for the ganja " (&). A. stands bail for B., who is charged with an 
offence, and as an indemnity for the bail takes from B. a sale deed of B.'s 

(d) Krlstodhone Ghose v. Brojo Gobindo 441. 

Roy (1897) 24 Cal. 895. (&) Alice Mary Hill v. William Clarke 

(e) Citing Pickering v. Ilfraconibe R. (1905) 27 All. 266. 

Co. L. R. 3 C. P. 235, 250 ; and Baiter (i) Mmsammat Roshun v. Muhammad 

v. HedgecocTt, 39 Ch. D. 520. (1887) Punj. Rec. no. 46 ; Sai Vijli v. 

(/) Srirangachariar v. Ramasami Nansa Nagar (1885) 10 Bom. 152. 

Ayyangar (1894) 18 Mad. 189. (k) Goj>alracv.Xallappa(l9()l')3Roin. 

(g) Joseph v. Solatia (1872) 9 B. L. R. L. R. 164. 



ENTIRE OR DIVISIBLE AGREEMENTS. 147 

house and also a rent-note whereby B. agrees thenceforward to occupy the S. 24. 
house as A.'s tenant and to pay rent to him. A. cannot sue B. on the reiit- 
note. " The sale deed and the rent-note are part and parcel of the same 
transaction," and " the rent-note is tainted with the same illegality which 
affects the sale deed " (M). Different consequences, however, may follow 
when a part of the consideration or "object" of an agreement is not 
illegal, but merely void in the sense that it is not enforceable in law. In 
such a case actual performance of such part may be a good consideration, 
though a promise to perform it would not have been. Thus a bond passed 
by a judgment debtor to the holder of a decree against him in consideration 
of the latter refraining from execution of the decree is void under s. 257A 
of the Civil Procedure Code, 1882, but not illegal. The decree-holder, there- 
fore, on performing his part of the agreement, was held entitled to recover 
on the executed consideration (/), being in itself a voluntary lawful forbear- 
ance, though not upon the executory agreement. If the promise to postpone 
execution of the decree were illegal the whole bond would be tainted with 
illegality, and the judgment creditor would then have no right to enforce pay- 
ment of the bond. But when the parties themselves treat debts void as well as 
valid as a lump sum, the Court will regard the contract as an integral one, 
and wholly void. Thus where a judgment debtor agreed to pay in a lump 
sum interest not awarded by a decree in addition to the sum decreed without 
the sanction of the Court it was held that, the promise to pay such interest 
being void under s. 257A of the Civil Procedure Code, 1882, the whole 
agreement was void(m). Section 257A has been omitted in the Code of 1908. 

The provisions of this section must be distinguished from those of s. 57, 
below. In a Bengal case a Mahomedan husband agreed by a registered 
document that he would pay over to his wife whatever money he might 
earn, and that he would do nothing without her permission, and that if he 
did so she would be at liberty to divorce him. In a suit by the wife to 
recover from him his earnings it was held that, though the latter part of 
the agreement might be unlawful, the suit was one to enforce the legal 
part, and the Court gave a decree to the plaintiff for her maintenance at 
Rs. 12 per month, stating that the fair construction of the agreement was not 
that the husband was to pay every rupee he earned, but that he was entitled 
to a reasonable deduction for expenses which he must necessarily incur (). 

Indian Trusts Act, 1882. S. 4 of that Act provides that where a trust 
is created for two purposes of which one is lawful, and the other unlawful, 
and the two purposes cannot be separated, the whole trust is void. 

(M) Laxmanlal v. Mulshankar (1908) (TH) Davlatsing v. Pandu (1884) 9 Bom. 

10 Bom. L. R. 553. 176. 

(T) Sank of Bengal v. Vyablioy Gangji (n) Poonoo Bibee v. Fyez Ituksh (1874) 

(1891) 16 Bom. 618. 15 B. L. R. App. 5. 

102 



L8 THE INDIAN CONTRACT ACT. 

S. 25. 25. An agreement made without consideration is void, 

unless 

Agreement with- . ... . 

out consideration, (1) it is expressed in writing and regis- 

writing and regi- tered under the law for the time being in force 
for the registration of [documents (o)], and is 
made on account of natural love and affection between parties 
standing in a near relation to each other ; or unless 

(2) it is a promise to compensate, wholly or in part, a 

person who has already voluntarily done 

or is a promise to . 

compensate for something for the promisor, or something 

something done, 1-1,1 i n n 11 

which the promisor was legally compellable to 
do ; or unless 

(3) it is a promise, made in writing and signed by the 

person to be charged therewith, or by his 

or is a promise to . . . 

pay a debt barred agent generally or specially authorised in that 

by limitation law. , - . 

behalf, to pay wholly or in part a debt of 
which the creditor might have enforced payment but for the 
law for the limitation of suits. 

In any of these cases, such an agreement is a contract. 

Explanation 1. Nothing in this section shall affect the 
validity, as between the donor and donee, of any gift actually 
made. 

Explanation 2. An agreement to which the consent 
of the promisor is freely given is not void merely because 
the consideration is inadequate ; but the inadequacy of 
the consideration may be taken into account by the 
Court in determining the question whether the consent of 
the promisor was freely given. 

Illustrations. 

(a) A. promises, for no consideration, to give to B. Es. 1,000. 
This is a void agreement. 

(b) A., for natural love and affection, promises to give his son, B., 

(0) The word " documents " has been by the Repealing and Amending Act XII 
substituted for the word "assurances" of 1891. 



CONSIDERATION. 149 

Rs. 1,000. A. puts his promise to B. into writing, and registers it. S. 25. 

This is a contract. 

(c) A. finds B.'s purse and gives it to him. B. promises to give 
A. Es. 50. This is a contract. 

(d) A., supports B.'s infant son. B. promises to pay A.'s expenses 
in so doing. This is a contract. 

(e) A. owes B. Es. 1,000, but the debt is barred by the Limitation 
Act. A signs a written promise to pay B. Es. 500 on account of the 
debt. This is a contract. 

(f) A. agrees to sell a horse worth Es. 1,000 for Es. 10. A.'s con- 
sent to the agreement was freely given. The agreement is a contract 
notwithstanding the inadequacy of the consideration. 

(g) A. agrees to sell a horse worth Es. 1,000 for Es. 10. A. denies 
that his consent to the agreement was freely given. The inadequacy 
of the consideration is a fact which the Court should take into account 
in considering whether or not A.'s consent was freely given. 



Consideration. This section declares, long after consideration has been 
defined (s. 2, sub-s. (d) ), that (subject to strictly limited exceptions) (p) it 
is a necessary element of a binding contract. This has already been assumed 
in s. 10. The present section goes on to state the exceptional cases in which 
consideration may be dispensed with. It is curious that the Act nowhere 
explicitly states that mutual promises are sufficient consideration for one 
another, though it is assumed throughout the Act, and seems to be involved 
in the definitions of " agreement " and " reciprocal promises " in s. 2, 
sub-ss. (e) and (f) (see the commentary thereon, pp. 23, 24, 26, above) (q). 

The most obvious example of an agreement without consideration is a 
purely gratuitous promise given and accepted. Such a promise has no 
legal force unless it comes within the first class mentioned in the present 
section. But there are other less obvious cases ; and they must be all 
the more carefully noted because neither the text nor the illustrations 
of this section throw any light on them. It is not enough that something, 
whether act or promise, appears, on the face of the transaction, to be given 
in exchange for the promise. That which is given need not be of any 

(p) The rule of the common law But these matters are of no practical 

cannot be properly stated in this way ; importance in India, 

for the formal contracts of English law, (?) This section, it has recently been 

which are binding by their form alone, observed, is exhaustive : Indran Jtama- 

are older than the doctrine of considera- swami v. Anthappa Chettlar (1906) 16 

tion. Ingenious attempts have been M. L. J. 422, at p. 426. This means, we 

made to treat consideration itself as a presume, that an agreement made without 

matter of form. This is paradoxical, for consideration is either enforceable under 

the essence of consideration is exchange this section or not enforceable at all, 

of value regardless of any particular form. which hardly seems to need authority. 



THE INDIAN CONTRACT ACT. 

S. 25. particular value ; it need not be in appearance or in fact of approximately 
equal value with the promise for which it is exchanged (see on explanation 
2, below) ; but it must be something which the law can regard as having 
some value, so that the giving of it effects a real though it may be a very 
small change in the promisee's position ; and this is what English writers 
mean when they speak of consideration as good, sufficient, or valuable. An 
apparent consideration which has no legal value is no consideration at all. 
A performance or promise of this kind is sometimes called an " unreal " 
consideration. 

Forbearance and Compromise as Consideration. Compromise is a very 
common transaction, and so is agreement to forbear prosecuting a claim, 
or actual forbearance at the other party's request, for a definite or for a 
reasonable time. It may seem at first sight that in all these cases the 
validity of the promise is doubtful. For the giving up, or forbearing to 
exercise, an actually existing and enforceable right is certainly a good con- 
sideration (r) ; but what if the claim is not well founded ? Can a cause 
of action to which there is a complete defence be of any value in the eye 
of the law ? If a man bargains for reward in consideration of his aban- 
donment of such a cause of action, does he not really get something for 
nothing, even if he believes he has a good case ? The answer is that 
abstaining or promising to abstain from doing anything which one would 
otherwise be lawfully free to do or not to do is a good consideration, and 
every man who honestly thinks he has a claim deserving to be examined (s) 
is free to bring it before the proper Court, and have the judgment of the 
Court on its merits, without which judgment it cannot be certainly known 
whether the claim is well founded or not ; for the maxim that every man is 
presumed to know the law, not a very safe one at best, is clearly inapplicable 
here. That which is abandoned or suspended in a compromise is not the 
ultimate right or claim of the party, but bis right of having the assistance 
of the Court to determine and, if admitted or held good, to enforce it. 
" If an intending litigant bond fide forbears a right to litigate a question 
of law or fact which it is not vexatious or frivolous to litigate, he does give 
up something of value. It is a mistake to suppose it is not an advantage, 
which a suitor is capable of appreciating, to be able to litigate his claim, 

(r) Jagadindra Nath v. Chandra Nath asked, " Is your cause just ? " may quite 

(1903) 31 Cal. 242. fairly answer: "I see nothing against 

0) He need not have a positive opinion good conscience in it ; whether it is good 

that it is justified ; for its success may in law is exactly what I want the Court 

depend on facts not within his own to tell me." These refinements, however, 

knowledge, or on unsettled questions of are perhaps fitter for the moralist than 

law, or both. Oftentimes a man who is for the lawyer. 



FORBEARANCE TO SUE. 151 

even if he turns out to be wrong " ((). Forbearance to sue for or demand a S. 25. 
merely honorary or customary debt may be a good consideration (u). 

The principle thus stated is followed by the Indian Courts. Thus 
where after the expiration of the time fixed for completion of a mortgage 
the mortgagee declined to advance the money unless the mortgagor con- 
sented to pay interest from the date fixed for the completion, and the 
mortgagor agreed to do so, it was held that there was a good consideration 
for the agreement, though time was probably not of the essence of the 
original contract. The mortgagee believed in good faith that he was 
entitled to rescind at once, and the abandonment of his claim to do so was 
consideration enough for the mortgagor's agreement to his terms (x). An 
agreement in the nature of a compromise of a lona fide dispute as to the 
right of succession to a priestly office is not without consideration (y) nor 
is a mutual agreement to avoid further litigation invalid on this ground (z). 
But a pledge or promise of security for an existing debt is void unless there 
is some forbearance or undertaking by the creditor (such as not pressing 
for payment, or accepting a reduced rate of interest) in return for it. Thus 
where the drawer of a hundi became insolvent before it fell due, and the plain- 
tiff, who was the holder in due course applied to the acceptor to give security 
for payment at maturity, and the latter executed a mortgage " by way of 
collateral security bond," it was held that, the plaintiff not having entered 
into any undertaking whatever, he could not recover on the mortgage deed (a). 

Promise to perform existing duty. It is well settled in England 
that the performance of what one is already bound to do, either by general 
law or by a specific obligation to the other party, is not a good consideration 
for a promise ; for such performance is no legal burden to the promisee, but, 
on the contrary, relieves him of a duty. Neither is the promise of such 
performance a consideration, since it adds nothing to the obligation already 
existing. Moreover, in the case of the duty being imposed by the general 
law, an agreement to take private reward for doing it would be against 

(f) Bowen, L. J., in Miles v. New notice that he would rescind if the 

Zealand Alford Estate Co. (1886) 32 Ch. defendant did not complete within a 

Div. 266, 291. Cp. Willy v. Elgee (1875) reasonable time ; see at p. 465. 

L. R. 10 C. P. 497. (y) Girijanund v. Sailajanund (1896) 

() Goodson v. Orierson [1908] 1 23 Cal. 645, 665, 666 ; Itameshwar Prosad 

K. B. 761 C. A. Even a gaming debt v. Lachmi Prosad (1904) 31 Cal. Ill, 

which for some purposes would itself be 131 132 ; Bhiwa Mahadshet v.Shivaram 

an " illegal consideration " under the Mahadshet (1899) 1 Bom. L. R. 495, 497. 

English Gaming Acts : Hyams v. Stuart (z) Bliima v. Ningappa (1868) 5 

King [1908] 2 K. B. 696, C. A. B. H. C., A. C. J. 75. 

(ar) Dadabhoy v. Pestonji (1893) 17 (a) Manna Lai v. Bank of Bengal 

Bom. 457. The plaintiff's right was (1876) 1 All. 309. 
really, it seems, to give the defendant 



1 2 THE INDIAN CONTRACT ACT. 

S. 25. public policy. But before applying this rule we must be careful to ascer- 
tain that a legal duty does exist. A promise to remunerate a person named 
as executor (not out of the estate itself) if he accepted the office and per- 
formed the duties of executor is not bad for want of consideration, since it 
is not a legal duty to accept the office (b) and perform those duties without 
claiming any remuneration. But a person served with a subpoena is legally 
bound to attend and give evidence in a court of law, and a promise to com- 
pensate him for loss of time or other inconvenience is void for want of 
consideration (e). Similarly an agreement by a client to pay to his vakil 
after the latter had accepted the vakdlatnama a certain sum in addition to 
his fee if the suit was successful is without consideration (d). And it has 
been held by the High Court of Allahabad that a bond passed by a judgment 
debtor to the holder of a decree against him for the amount of the decree 
plus Us. 3 paid for him for the stamp and registration charges of the bond 
is without consideration where the decree was made by a Court having no 
jurisdiction to make it, and the bond was passed to secure the release of the 
debtor from arrest (e). 

But if a man, being already under a legal duty to do something, under- 
takes to do something more than is contained therein, or to perform the 
duty in some one of several admissible ways in other words, to forego the 
choice which the law allows him this is a good consideration for a promise 
of special reward (/). 

If A. is already bound to do a certain thing, not by the general law, 
but under a contract with Z., it seems plain that neither the performance 
of it nor a fresh promise thereof without any addition or variation will 
support a promise by Z., who is already entitled to claim performance. 
For Z. is none the better thereby in point of law, nor A. any worse. But 
what if M., a third person not at present entitled to claim anything, offers 
a promise to A. in consideration of (a) A.'s performance of his obligation 
to Z., or (b) A.'s promise to M. to perform that obligation ? These questions 
have given rise to great difference of learned opinion in England and 
America (#). They do not seem to have been considered by Indian Courts. 

(*) Narayan v. Shajani (1894) 22 Cal. (e) Banda All v. Banspat Sing/i(l882) 
14. It was also argued, without success, 4 All. 352. 

that the agreement was against public (/) England v. Davidson (1840) 11 A. 
policy as making it the executor's interest & E. 856, 52 R. K. 522 (reward to con- 
to prolong the administration of the estate stable for services beyond duty) ; Hartley 
against his duty. v. Pomonby (1857) 7 E. & B. 872. 

(c) Sasluinnah Chttti v. Ramasamy GO See Pollock on Contract, 7th ed. 
Chettl (1868) 4 M. H. C. 7. 186190, and the references given at 

(cT) Ramchandra Chintaman v. Kalu p. 189 ; Anson, llth ed. 106 ; L. Q. R. xx. 
Raju (1877) 2 Bom. 362. Cf. Ganga Ram 9 (January, 1904) ; Harv. Law Rev. xvii. 
v. Den Das (1907) Punj. Rec. no. 61. 71 ; Leake, 5th ed. 436, 437. 



PROMISE TO PERFORM EXISTING DUTY. 153 

Such English authority as there is favours the opinion that the performance S. 25. 
is a good consideration ; but the reasons given are not very clear, and seem 
to assume that both performance and promise must be good considerations 
in such a case, or neither (A). It is submitted, however, that on principle 
this assumption is not tenable. The test is whether there is any legal 
detriment to A., the supposed promisee. Now A.'s performance of what 
he already owes to Z. is no detriment to him, as has been pointed out ; and 
indeed the resulting discharge of his liability seems rather to be an advan- 
tage ; and therefore it is no consideration for a new promise by any one. 
But A.'s promise to M. to do something, though he may have already 
promised Z. to do that same thing, is the undertaking of a new obligation 
to a new party. There is no reason why it should not be made binding by 
M.'s counter-promise, as in any other case of a contract by reciprocal 
promises, unless the law forbids the same performance to operate in discharge 
of two distinct contracts. There is no positive authority for any such rule 
of law, and when we bear in mind that in a contract by reciprocal promises 
the promises are the consideration for each other, and not the performance, 
no such rule appears to be demanded or warranted by principle. 

Whatever resolution of the speculative question may ultimately prevail, 
the difficulty may be removed, in the case of performance, by the slightest 
appreciable addition to the performance already contracted for, and, in the 
case of promise, by A.'s new undertaking to M. being or including an 
undertaking not to rescind or vary, without M.'s consent, his existing 
contract with Z. 

Transfer of immovable property. This section has been held to 
apply to cases of sale and mortgage of immovable property. Thus in 
Manna Lai v. Bank of Bengal (i) the Allahabad High Court held a mort- 
gage effected by a duly registered deed to be void for want of consideration 
under this section. Similarly in Tatia v. Babaji (&) Fulton, J., held that a 
sale effected by a duly registered deed under which the purchaser had 
entered into possession was void for want of consideration under this 
section. Farran, C.J., however, was inclined to the opinion that convey- 
ances of land in the Mufassal perfected by possession or registration, where 
the consideration expressed in the conveyance to have been paid had not 
in fact been paid, could not be put in the same category as agreements 

(/() Sha&well v.Shadivell (1860) 9 C. B. consideration was supposed to beperform- 

N. S. 159, but qucere whether there was in ance or promise. The present writer is 

fact any intention to create a legal obliga- free to confess that the conclusions now 

tion at all (see the dissenting judgment submitted have been arrived at only after 

of Byles, J.) ; Scotson v. Pegg (1861) 6 long hesitation. 

H. & N. 295, Finch, Sel. Ca. 333, where it (i) (1876) 1 All. 309. 

is rather difficult to make out whether the (/<) (1896) 22 Bom. 176, 181, 182. 



154 THE INDIAN CONTRACT ACT. 

S. 25. void for want of consideration (/). The first of these two cases was 
decided before the Transfer of Property Act IV of 1882 was enacted. 
As regards the other case, that Act was not yet extended to the Bombay 
Presidency when the deed of sale was executed. It would seem, however, 
that the result would be the same under s. 54 of that Act read with s. 4. 
The latter section declares that the chapters and sections relating to con- 
tracts in that Act shall be taken as part of the Contract Act. 

Negotiable Instruments. The law merchant has almost but, as it is 
held by something very near a fiction, not quite made an exception to 
the rule of consideration in the case of negotiable instruments, or rather 
established another and independent rule. The Negotiable Instruments 
Act XXVI of 1881, s. 118, affirming the well-settled general law, enacts 
that until the contraiy is proved the presumption shall be made that every 
negotiable instrument was made or drawn for consideration ; and that 
every such instrument, when it has been accepted, endorsed, negotiated, or 
transferred, was accepted, endorsed, negotiated, or transferred for con- 
sideration. The second branch of the above rule stands as illustration (c) 
to s. 114 of the Evidence Act I of 1872. 

We now come to the exceptional cases in which consideration is 
dispensed with. 

Registered writing. The English doctrine that the " solemnity of a 
deed " is of itself sufficient to make a promise expressed in a sealed writing 
valid has never been received in British India (m). The Act does not allow 
any form alone to dispense with consideration, but only writing and regis- 
tration coupled with the motive of natural love and affection between 
nearly related parties. The words " near relation " have not been judicially 
construed. The Courts would, it need hardly be said, have to construe 
them uniformly without regard to variations in the reckoning of degrees of 
kindred, for the purposes of inheritance or the like, in different personal 
laws or customs (ri). A registered agreement between a Mahomedan husband 

(I) 22 Born, at p. 183. but this is not material for Indian pur- 

(/) Kaliprasad Tewarl v. Raja Sahib poses. 

Prahlad Sen (1869) 2 B. L. R. (P. C.) at (n) Jafar All v. Ahmed All (1868) 5 

p. 122. In England the formal operation B. H. C., A. C. J. 37, where it was held, 

of a deed is much older than the doctrine before the Act, that the relation of 

of consideration. It is therefore erroneous cousins would not support a voluntary 

to say, as text-books commonly did at one agreement, though registered, throws no 

time, that the formality " imports a con- light on the possible construction of the 

sideration." On the contrary, the doctrine Act ; for by the Common Law, which the 

of consideration was introduced only Court apparently followed, no degree of 

when informal contracts were made kinship, however near, would suffice, 
actionable by a series of ingenious fictions ; 



REGISTERED WRITING. 155 

and his wife to pay his earnings to her is within the provisions of cl. 1 of the S. 25. 
section (0). So is a registered agreement whereby A. on account of mutual 
love and affection for his brother, B., undertakes to discharge a debt due by B. 
to C. In such a case, if A. does not discharge the debt, B. may discharge it, 
and sue A. to recover the amount (p). But an agreement in writing and 
registered, whereby a member of an undivided Hindu family, without 
any valuable consideration, renounces all right to the family property in 
favour of the remaining coparceners, is void unless it is executed for natural 
love and affection (q). It is not to be supposed that the nearness of 
relationship necessarily imports natural love and affection. Thus where a 
Hindu husband executed a registered document in favour of his wife, 
whereby, after referring to quarrels and disagreement between the parties, 
the husband agreed to pay her for a separate residence and maintenance, 
and there was no consideration moving from the wife (r), it was held in a 
suit by the wife brought on the agreement that the agreement was void as 
being made without consideration. It was further held that the agreement 
could not be said to have been made on account of natural love and affec- 
tion, the recitals in the agreement being opposed to that view (*). It is 
difficult to reconcile with the last case the decision of the Bombay High 
Court in Bhiiva Mahadshet v. Shivaram Mahadshet (f). In that case A. 
sued his brother B. upon a registered instrument whereby B. had agreed to 
give A. one-half of certain property. It appeared that A. had previously 
sued B. to recover that share from him, alleging that the property was 
ancestral, but the suit was dismissed on B. taking a special oath that the 
property was not ancestral. It further appeared on the plaintiff's own 
admissions that the brothers had long been on bad terms. Upon these 
facts the Subordinate Judge held that the agreement was void for want of 
consideration, and that it could not be said to have been made on account 
of natural love and affection so as to come within the first exception to the 
section, and the decision was affirmed by the District Judge. On appeal 

(0) Poonoo Bibee v. Fyez BultsJi (1874) obtaining a separate residence and main- 

15 B. L. R. App. 5. tenance, such as violence on the part of 

(p) Venltatasamy v. Rangasamy (1903) the husband which would render it unsafe 

13 Mad. L. J. 428. for the wife to continue to live with him, 

(#) Appa Plllui v. Ranga Filial (1882) or such continued ill-usage as would be 
6 Mad. 71. The facts cf the case did not termed cruelty in the English Court, 
show that the agreement was made on There would then have been ample con- 
account of natural love and affection. sideration to support the agreement. 

(r) It would, of course, have been () RajluMy Dabee v. Bhootnnth (1900) 

different if the facts had disclosed such a 4 C. W. N. 488. 
state of circumstances as would, under (f) (1899) 1 Bom. L. E. 495. 
the Hindu law, have justified the wife in 



156 THE INDIAN CONTRACT ACT. 

S. 25. the High Court held that the agreement must be held to have been made 
for natural love and affection, and that A. was entitled to a decree. The 
Court said : ' The District Judge dismissed it (the suit), holding the 
document void for want of consideration. . . . The Subordinate Judge 
had held the same. He said ' there was no consideration for the agree- 
ment. The defendant voluntarily agreed to give half of the plaint property 
to the plaintiff to secure reconciliation with the plaintiff.' It seems to us, 
however, that this is just the case to which s. 25 (1) of the Contract Act 
should be held to apply. The defendant had such natural love and affec- 
tion for his brother that, in order to be reconciled to him, he was willing 
to give him this property." As natural love and affection cannot be 
inferred as a fact merely because no other motive for the promise is shown, 
it would seem that the Court presumed it from the relation of the parties. 
One would have thought that the presumption, if any, was rebutted by the 
plaintiff's own admissions. A desire for a reconciliation prompted (as the 
learned Judge of the High Court thought) by love and affection for the 
plaintiff is not strongly evinced by the subsequent conduct of the defendant 
in declining to perform the contract and driving the plaintiff to a suit. But, 
however this may be, it appears to us anything but safe to hold that a 
promise by one brother to another, unsupported by any consideration, and 
made solely with a view to purchase peace, can be enforced in a Court of 
law on the bare supposition that the object was reconciliation, and that the 
reconciliation was prompted by natural love and affection. 

Compensation for voluntary services. The second sub-section con- 
siderably extends the real or supposed exceptions (for their authority is by 
no means clear) allowed in the Common Law to the principle that past 
consideration is no consideration at all, since the consideration and the 
promise have to be simultaneous (w). The language of the Act is quite 
clear, and must be taken as expressing a deliberate policy ; it would there- 
fore be useless to discuss the English rules. 

The act voluntarily done must have been done for the promisor (x). 
If it is done for any other person, the promise does not come within the 
provisions of this clause. In an Allahabad case the defendants by a 
written agreement promised to pay to the plaintiff a commission on articles 
sold by them in a market established by the plaintiff at his expense. The 
market was not established at the desire of the defendants, nor was it 

O) As to the English law see Anson, knowledge of the promisor, or otherwise 

llth ed. 110 sqq. and cp. p. 128, above. than at his request, does the latter some 

(x) Not at his request. That case is service, and the promisor undertakes to 

covered by s. 2 (d), p. 11, above. The recompense him for it" : perFarran,C. J., 

enactment now before us " appears to Sindha v. Abraham (1895) 20 Bom. 755. 
cover cases where a person without the 



COMPENSATION FOR VOLUNTARY SERVICES. 157 

erected for them, but this was done at the request of the Collector of the S. 25. 
place. The only ground for making the promise was the expense incurred 
by the plaintiff in establishing the ganj. The Court held that the promise 
could not be supported under the present sub-section (y). Further, the act 
voluntarily done must have been done for a promisor who was in existence 
at the time when the act was done. Hence work done by a promoter of a 
company before its formation cannot be said to have been done for the 
company (z). Again, the act done must have been done for a promisor 
who is competent to contract at the time when the act was done. Hence a 
promise by a person on attaining majority to repay money lent and 
advanced to him during his minority does not come within the exception, 
the promisor not being competent to contract when the loan was made to 
him. It has been so held by the High Court of Madras (a). A different 
view has been taken by the High Court of Calcutta (b), but it does not 
appear to be sound law. See notes to s. 11 under the head "Minor's 
Contract," on p. 55, above. A promise to pay a woman an allowance for 
past cohabitation has been regarded as an undertaking by the promisor to 
compensate the promisee for past services voluntarily rendered to him (c) ; 
but the correctness of these decisions may be doubted. It is true that in 
English law past, cohabitation, though no better in law than any other past 
consideration, is not an unlawful consideration (d) so as to make a formal 
instrument void which is in fact given to secure an allowance therefor. 
But in order to support the Indian decisions just cited it must be held that 
cohabitation is at the time such a lawful voluntary service as to be a proper 
subject for compensation, which is quite another matter (e). 

It is clear that a case cannot come within this exception unless there 
is a promise in the first instance. A clause in a memorandum or articles of 
association of a company providing for payment to a promoter of the 
company does not constitute a promise by the company to the promoter. 

(y) Durga Prasad v. Saldeo (1880) 3 v. Subhadri Ammal (1903) 13 Mad. L. J. 

All. 221. 7, 13. 

(c) Ahmedabad Jubilee S. fy W. Co. v. (d) Gray v. MatMas (1800) 5 E. R. 48, 

Chhotalal (1908) 10 Bom. L. R. 141, 143. 5 Ves. 286 ; Beaumont v. Reeve (1846) 8 

So it is well settled in England that a Q. B. 483. It may perhaps be doubted 

company cannot ratify acts of its promo- whether the effect given to the present 

ters done before it was formed. sub-section by applying these authorities 

(a) Itidran Ramaswami v. Anthappa to it was contemplated by the framers of 

Chettiar (1906) 16 Mad. L. J. 422. the Act. 

(&) Musammat Kundaii Bibi v. Sree (e) See on s. 23, p. 128, above. At all 

Nai'tnjan (1907) 11 C. W. N. 135. events adulterous intercourse will not 

(c 1 ) Dhiraj Kuar v. Bikramajit Singh support a subsequent promise of compen- 

(1881) 3 All. 787 ; Man Kuar v. Jasodka, sation under this clause: Alice Mary 

Kuar (1877) 1 All. 478 ; laUshminarayana Hill v. William Clarke (1905 27 AIL 266. 



158 THE INDIAN CONTRACT ACT. 

S. 25. Hence a claim against a company for remuneration by a promoter of the 
company cannot be supported under this section, where such claim is based 
merely on the provisions of the memorandum and articles of association of 
the company (/). 

Promise to pay a barred debt. Sub-s. (3) reproduces modern English 
law. The reason for upholding these promises was thus stated soon after 
the Act came into force by Westropp, C. J. (g) : " The general rule of law, 
no doubt, is that a consideration merely moral is not a valuable considera- 
tion such as would support a promise (ti) ; but there are some instances of 
promise which it was formerly usual to refer to the now exploded principle 
of previous moral obligation, and which are still held to be binding, 
although that principle has been rejected. Amongst those instances is a 
promise after full age to pay a debt contracted during infancy, and a 
promise (in writing) in renewal of a debt barred by the Statute of Limita- 
tions. The efficacy of such promises is now referred to the principle that 
a person may renounce the benefit of a law made for his own protection." 
To create a "promise" within the meaning of this enactment it is not 
necessary that there should be an accepted proposal reduced to writing. 
All that is necessary is that there should be a written proposal by the 
promisor accepted before action, for a written proposal becomes a promise 
when accepted ('). 

The distinction between an acknowledgment under s. 19 of the 
Limitation Act and a " promise " within the meaning of this section is of 
great importance. Both an acknowledgment and a promise are required 
to be in writing signed by the party or his agent authorised in that behalf ; 
and both have the effect of creating a fresh starting point of limitation (A). 
But while an acknowledgment under the Limitation Act is required to be 
made before the expiration of the period of limitation, a promise under 
this section to pay a debt may be made after the limitation period. After 
the period of limitation expires, nothing short of a fresh promise will 
provide a fresh period of limitation (I). The question occasionally arises 
whether a writing relating to a barred debt amounts to an acknowledgment 

(/) AJtmedabad Jubilee S. $' W. Co. v. (&) An acknowledgment in writing is 

Clthotalal (1908) 10 Bom. L. R. 141 ; Eley not the only mode of creating a fresh 

v. Posit ire Government Security Life starting point of limitation in the case of 

Inxura-nce Co. (1876) 1 Ex. D. 88. a debt not barred by limitation. An oral 

(ff) Tillakckand v. Jitamal (1873) 10 agreement to extend the time of payment 

B. H. C. 206, 215. may effect the same purpose: S/iri>iicnx 

(A) Eastwood v. Kenyan, 11 Ad. & E. v. Raglwnath (1902) 4 Bom. L. R. 50. 

438 ; Beaumont v. Reeve, 8 Q. B. 483. (/) See Ganga Prasad v. Ram Dayal 

(0 Appa Rao v. Suryapraltasa Rao (1901) 23 All. 502, at p. 504. 
(1899) 23 Mad. 94, 97, 98. 



PROMISE TO PAY BARRED DEBT. 159 

or to a promise. If it amounts to an acknowledgment, the writing could S. 25. 
not avail the plaintiff under this section ; but it is otherwise where it 
amounts to a promise. Thus khata or an account stated has been held 
to be a mere acknowledgment as distinguished from a promise under this 
section (ni). Similarly a bare statement of an account is not a promise 
within the meaning of this section (n). In the same way the words bald 
deva (balance due) at the foot of a Gujarati account were held not to 
amount to a promise (0). On the other hand, where a tenant wrote to 
his landlord in respect of rent barred by limitation, "I shall send by the 
end of Veyshak month," it was held that the words constituted a promise 
under this section (p). In a recent Bombay case, a khata signed by the 
defendant ran as follows : " Es. 200 were found due on the account of the 
previous khata having been made up. For the same this khata is passed. 
The moneys are payable by me. I am to pay the same, whenever you may 
make a demand." It was held that the khata was a promise to pay 
within the meaning of this section^). In Watson v. Yates(r) the 
defendant, after his debt had become barred by limitation, wrote as 
follows to his creditor in reply to a demand for payment : " I would 
assure you that I bear the matter in mind, and will do my utmost to repay 
the money as soon as I possibly can." It was held that this constituted 
a conditional promise to pay the barred debt, the condition being the 
ability of the defendant to pay. The plaintiff in the case failed to show 
that the defendant was able to pay, and it was held that the defendant 
could not, therefore, be held bound. 

Agent generally or specially authorised in that behalf. A Collector, as 
agent to the Court of Wards, is not an agent within the meaning of this 
section to bind a ward of the Court of Wards by a promise to pay a 
barred debt (s). 

Debt. The expression "debt" in this clause includes a judgment 

(;) C/iowksi Himutlal v. Chowhsl Rec. no. 35, the last two being cases 

Achrutlal (1883) 8 Bom. 194. under the Indian Stamp Act II of 1899. 

(M) Ramji v. Dharma (1882) 6 Bom. () Ckandraprasad v. Varajlal (1906) 

683. 8 Bom. L. E. 644 ; Malibub Jan v. Nur- 

(<) Ranchhoddas Nathulhai v. Jey- iid-Dln (1905) Punj. Rec. no. 102. 

cluuid Khushalchand (1884) 8 Bom. (/) (1887) 11 Bom. 580. See the 

405. similar English authorities collected in 

(p) Appa Rao v. Swryapraktu* Rao Leake on Contracts, 5th ed. 702, or the 

(1899) 23 Mad. 94. See also Raghoji v. editor's note to Tanner v. Smart (1827) 

Abdul Karim (1877) 1 Bom. 590 ; CliMur 30 R. R. 461, 6 B. & C. 603. 

Jagsl v. Julal (1877) 2 Bom. 230 ; Laxu- (s) Suryanarayana v. Narendra That- 

milui v. Ganesh Ragliunath (1900) 25 raz (1895) 19 Mad. 255. 
Bom. 373 ; Daula v. Gonda (1903) Punj. 



1QO THE INDIAN CONTRACT ACT. 

S. 25. debt. A promise, therefore, to pay the amount of a decree barred by 
limitation does not require any consideration to support it (t). 

An insolvent who has obtained his final discharge is under no legal 
obligation to pay any debt included therein, and any promise to pay it is 
accordingly without consideration. Such a debt is said to be barred by 
insolvency, and the Contract Act contains no exception in favour of a 
promise to pay it (n). It is not clear, however, whether the same principle 
would apply to a promise without new consideration to pay a debt in 
respect of which the insolvent has obtained only his personal, and not his 
final, discharge, and which is included in the judgment entered up 
against him in favour of the official assignee. In such a case it will be 
observed that the creditor's remedy is not, strictly speaking, barred, but 
is transferred to the official assignee, who alone can recover the debt in 
the manner and subject to the conditions provided by the Insolvent 
Debtors Act of 1848. In Naorqfi v. Kazi SidicTc (x) the defendant filed 
his petition and schedule in the Insolvent Debtors' Court, and subsequently 
obtained his personal discharge. On the same day judgment was entered 
up against him in the name of the official assignee for the full amount of 
debts stated in the schedule. After this was done the plaintiff, who was 
a scheduled creditor for Es. 5,000, entered into an agreement with the 
insolvent whereby, in satisfaction of his claim for Rs. 5,000, he agreed to 
accept from the insolvent a present cash payment of Rs. 800, and either 
the execution of a conveyance to him of a certain property or the payment 
of a further sum of Rs. 1,600 in cash (see s. 63, post}. The creditor sued 
the insolvent on the agreement, and one of the defences was that there 
was no consideration. It was held that the defendant's promise was not 
without consideration, for the plaintiff by the agreement impliedly gave 
up his right to share in any future rateable distribution under s. 86 of the 
Insolvent Debtors Act, and also the right accessory thereto, namely, of 
opposing the final discharge of the insolvent. The agreement, however, 
was held to be void as being against public policy within the provisions of 
s.230). 

Explanation 1 needs no comment. It may be taken as a statement 
made by way of abundant caution. 

Explanation 2 declares familiar principles of English law and equity. 
First, the Court leaves parties to make their own bargains ; it will not set 

(t) Heera Loll v. Dhunput Singh (u) Per Cur. in Naorojl v. Kazi Sidick 

(1878) 4 Cal. 500; Billings v. The Un- (1896) 20 Bom. 636, 642, 643. 

covenanted Service Sank (1881) 3 All. (#) See last note. 

781; Shripatrav v. Gorind (1890) 14 (y) See pp. 112, 129, above. 
Bom. 390. 



VALUABLE CONSIDERATION. 

up its own standard of exchangeable values. There must be some con- S. 25. 
sideration which the law can regard as valuable ; but the fact that a 
promise is given for a certain consideration, great or small, shows that the 
promisor thought the consideration worth having at the price of his 
promise. Hobbes, though not a lawyer and having no love for the 
Common Law, correctly expressed its doctrine when he said in his 
" Leviathan " : " The value of all things contracted for is measured by 
the appetite of the contractors, and therefore the just value is that which 
they be contented to give." One or two English examples will suffice. 
Parting with the possession of goods, even for a very short time, and 
though it does not appear what advantage the promisor was to have from 
it, is consideration enough for a promise to return them in the same 
condition (z). An agreement to continue, though not for any defined 
time, an existing service, determinable at will, is a sufficient con- 
sideration (). If the owner of a newspaper offers the financial editor's 
advice to readers who will send their queries to a given address, the 
trouble of sending an inquiry is a sufficient consideration for an under- 
taking that reasonable care shall be used to give sound advice in answer 
thereto. It would seem that a contract is concluded as soon as the 
reader has sent in his inquiry, the general offer being not merely an 
invitation, but the proposal of a contract (see p. 45 sqq. above) ; though 
it would also seem that only nominal damages would be recoverable if the 
editor did not answer at all(>). 

Secondly, the fact that a consideration is grossly inadequate may 
nevertheless be material as evidence of coercion, fraud, or undue influence. 
The leading modern dictum on this subject will immediately be given as 
cited in an Indian case by the Judicial Committee. It must be remembered 
that inadequacy of consideration may be evidence that the promisor's 
consent was not free, but is no more ; it is not of itself conclusive. 
Standing alone, inadequacy, as such, is not a bar even to specific 
performance (c). 

In a suit (d) to set aside a conveyance on the ground of inadequacy of 
consideration the Judicial Committee observed : " The question then 
reduces itself to whether there was such an inadequacy of price as to be 
a sufficient ground of itself to set aside the deed. And upon that subject 

0) Bainbrldge v. Flrmstone (1838) 8 English authorities are not quite uniform, 

A. & E. 743, 53 E. B. 234. but this has been the accepted opinion 

(a) Gravely v. Barnard (1874) L. E. for about half a century ; see Pollock, 

18 Eq. 518. Contract, 7th ed. 620, 621. 

(V) De la Bere v. Pearson, Ltd. [1908] (d) Ttie Administrator - General of 

1 K. B. 280, C. A. Bengal v. Juggeswar Roy (1877) 3 Cal. 

(c) Specific Belief Act, s. 28 (a). 192, 196. 

i.e. 11 



162 THE INDIAN CONTRACT ACT. 

Ss. 25, 26. it may be as well to read a passage from the case of Tennent v. Tennents 
(L. R. 2 Sc. & D. 6) in which Lord Westbury very shortly arid clearly 
stated the law upon this subject. He says: 'The transaction having 
clearly been a real one, it is impugned by the appellant on the ground that 
he parted with valuable property for a most inadequate consideration. 
My Lords, it is true that there is an equity which may be founded upon 
gross inadequacy of consideration. But it can only be where the 
inadequacy is such as to involve the conclusion that the party either did 
not understand what he was about or was the victim of some imposition.' 
Their Lordships are unable to come to the conclusion that the evidence 
of inadequacy of price is such as to lead them to the conclusion that the 
plaintiff did not know what he was about or was the victim of some 
imposition." 

In a case (e) decided by the Bombay High Court before the enactment 
of the Contract Act, a mortgage was executed by ignorant and illiterate 
peasants who were seeking to raise moneys for tilling their lands, in 
favour of the plaintiffs, who were money-lenders by profession. The 
mortgage included, amongst other unusual provisions, a covenant to sell 
the property to the mortgagees at a gross undervalue in certain events. 
In setting aside the mortgage as fraudulent and oppressive, Westropp, 
C. J., said : " Mere inadequacy of consideration, it is true, unless it be so 
great as to amount to evidence of fraud, is not sufficient ground for 
setting aside a contract, or refusing to decree a specific performance of 
it. Inadequacy of consideration, when found in conjunction with any 
other such circumstance as suppression of the value of property, mis- 
representation, fraud, surprise, oppression, urgent necessity for money, 
weakness of understanding, or even ignorance, is an ingredient which 
weighs powerfully with a Court of Equity in considering whether it should 
set aside contracts, or refuse to decree specific performance of them " (/). 

26. Every agreement in restraint of the 

Agreement in . i 

restraint of mar- marriage or any person, other than a minor, is 

riage void. 

void. 

The wide and unguarded language of this section is taken from the 
draft Civil Code of New York (s. 836). There is very little positive 
authority in England, but it seems probable that a contract limited to not 

(e) Kedari Sin Harm v. Atmarambhat Act and ss. 25 and 28 (a) of the Specific 

(1866) 3 B. H. C. A. C. 11. Relief Act, See to the same effect 

(/) 3 B. H. C. A. C. at pp. 18, 19 S/timbhat v. Yesliwantrao (1900) 25 Bom. 

Compare s. 53 of the Transfer of Property 126. 



AGREEMENTS IN RESTRAINT OF MARRIAGE OR TRADE. 163 

marrying a certain person or any one of a certain definite class of persons Ss- 26, 27. 
would be held good (#). Apparently such agreements must be held void 
in British India. 

Again, an agreement by a Hindu at the time of his marriage with his 
first wife not to marry a second wife while the first was living would be 
void according to the literal terms of this section. It may be doubted 
whether such a result was ever contemplated by the Legislature. But 
however that may be, it must be remembered that the Hindu law expressly 
recognises polygamy, and it is not clear that, apart from the present 
section, agreements of this class would not be void as tending to defeat 
the provisions of Hindu law (see s. 23, ante). Like observations apply to 
similar agreements by Mahomedans, who can, according to their law, 
marry as many as four wives. 

27. Every agreement by which any one is restrained 
A reementin from exercising a lawful profession, trade or 
restraint of trade business of any kind, is to that extent void. 

Exception 1. One who sells the goodwill 
of a business may agree with the buyer to 

Saving of agree- . . ... 

ment not to carry refrain from carrying on a similar business, 

011 business of 

which goodwill is within Specified local limits, so long as the 
buyer, or any person deriving title to the 
goodwill from him, carries on a like business therein : Pro- 
vided that such limits appear to the Court reasonable, regard 
being had to the nature of the business. 

Exception 2. Partners may, upon or in anticipation of 
a dissolution of the partnership, agree that 

of agreement 

between partners some or all ol them will not carry on a busi- 

prior to dissolution ; . 

ness similar to that of the partnership within 
such local limits as are referred to in the last preceding 
exception. 

Exception 3. Partners may agree that some one or all 
of them will not carry on any business, other 

or during con- 
tinuance of than that of the partnership, during the con- 
partnership. 

tmuance of the partnership. 

(</) Pollosk 7th ed. 350, 351 

112 



14 THE INDIAN CONTRACT ACT. 

S. 27. Agreements in Restraint of Trade. This section, like the last, 

unfortunately follows the New York draft Code, which has been the evil 
genius of this Act. The first paragraph is taken almost word for word 
from s. 833 of that production. The original draft of the Indian Law 
Commission did not contain any specific provision on the subject. 

The New York draftsmen were of opinion that "contracts in restraint 
of trade have been allowed by modern decisions to a very dangerous 
extent," and deliberately tried to narrow the common law. Meanwhile 
the common law has, on the contrary, been widening ; the old fixed rules 
as to limits of space have been broken down, and the Court has only to 
consider in every case of a restrictive agreement whether the restriction is 
"reasonable . . . in reference to the interests of the parties con- 
cerned and reasonable in reference to the interests of the public." In 
determining this the nature and extent of the business to be protected are 
material elements (A). The extension of modern commerce and means of 
communication has displaced the old doctrine that the operation of agree- 
ments of this kind must be confined within a definite neighbourhood. 
But the Anglo-Indian law has stereotyped that doctrine in a narrower 
form than even the old authorities would justify. The first and second 
exceptions are also taken with slight variations from the New York 
draft Code. 

The section is general in its terms, and declares all agreements in 
restraint of trade void (') pro tanto, except in three cases specified in the 
exceptions. The object appears to have been to protect trade. It has 
been said that " trade in India is in its infancy ; and the Legislature may 
have wished to make the smallest number of exceptions to the rule against 
contracts whereby trade may be restrained "(&). That reason, however, 
cannot have been supposed applicable in New York even forty or fifty 
years ago. It looks as if the New York clause had been simply copied 
without reflection by the draftsman of the Indian legislative department. 

To escape the prohibition, it is not enough to show that the restraint 
created by an agreement is partial, and not general ; it must be distinctly 
brought within one of the exceptions. " The words ' restrained from 
exercising a lawful profession, trade or business ' do not mean an absolute 
restriction, and are intended to apply to a partial restriction, a restriction 
limited to some particular place, otherwise the first exception would have 
been unnecessary." Moreover, "in the following section (s. 28) the 

(A) Nordenfelt v. Maxim-Nordenfelt Maneklal v. Sharafali Isaltji (1897) 22 

Co. [1894] A. C. 535, 565 (Lord Mac- Bom. 861, 866. 

naghten). (j) p er Kindersley, J., in Oakes $ Co. 

(0 Certainly not "illegal" : Harib/iai v. Jackson (1876) 1 Mad. 134, 145. 



AGREEMENTS IN RESTRAINT OF TRADE. 165 

legislative authority when it intends to speak of an absolute restraint, S. 27. 
and not a partial one, has introduced the word 'absolutely.' . . . 
The use of this word in s. 28 supports the view that in s. 27 it was intended 
to prevent not merely a total restraint from carrying on trade or business, 
but a partial one. We have nothing to do with the policy of such a law. 
All we have to do is to take the words of the Contract Act, and put upon 
them the meaning which they appear plainly to bear " (7). This view of 
the section was expressed by Couch, C.J., in Madhub Chunder v. Rajcoomar 
Doss (m). The parties in that case carried on business as braziers in a 
certain locality in Calcutta. The plaintiff's mode of business was found 
by the defendants to be detrimental to their interests, and an arrange- 
ment was thereupon entered into between the parties whereby the plaintiff 
agreed to stop his business in that locality, and the defendants promised in 
consideration of his doing so to pay to the plaintiff all sums which he had 
then disbursed as advances to workmen. Pursuant to the agreement, the 
plaintiff ceased carrying on business in that locality, and the defendants 
having failed to perform their part of the contract, he sued them to recover 
Es. 900, being the amount advanced by him to the workmen. It was held 
that the agreement was void under this section, though the restriction put 
on the plaintiff's business was limited to a particular place only, and that 
the plaintiff was not, therefore, entitled to any damages. " If the agree- 
ment on the part of the plaintiff is void, there is no consideration for the 
agreement on the part of the defendants to pay the money ; and the whole 
contract must be treated as one which cannot be enforced " (w). Similarly 
a stipulation in a contract prohibiting the defendant from engaging in the 
cultivation of tea for a period of five years from the date of the termina- 
tion of his agreement with the plaintiffs was held void, although the 
restriction only extended to a distance of forty miles from the plaintiffs tea 
gardens (o). And where by the terms of a contract the plaintiff agreed 
with the defendant not to carry on the business of a dubash for a period of 
three years, and to act as a stevedore only of five ships to be given to him 
by the defendant, and not to do any services to ships belonging to anybody 
else for the like period, it was held that the agreement was void, as the 
first branch imposed an absolute, and the second a partial, restraint on the 
plaintiffs business (p). In an earlier Madras case a covenant whereby the 



(0 The generality of the section, as (m) (1874) 14 B. L. R. 76, 85, 86. 

thus explained, would seem to have been () lb. at p. 86. 

overlooked in framing illustration (e) to (o) The Brahmajmtra Tea Co., Ltd. T. 

s. 57 of the Specific Relief Act, which, Scai-th (1885) 11 Cal. 545, 549. 

however, does not actually assert any- Q;) Nur All Dubash v. Abdul All 

thing to the contrary. (1892) 19 Cal. 765. 



16 THE INDIAN CONTRACT ACT. 

S. 27. defendants agreed with the plaintiffs, at the time of entering into their 
service at Madras, not to carry on the same business (that of dressmakers 
and milliners) on the expiry of the period of service within 800 miles from 
Madras, was held void, as being in restraint of trade (y). And it was said 
the decision would be the same even if the validity of the contract depended 
on the English law, as the limit of 800 miles would be unreasonable having 
regard to the nature of the business (r). 

Restraint during term of service. An agreement of service by which 
an employee binds himself, during the term of his agreement, not to com- 
pete with his employer directly or indirectly is not in restraint of trade. If 
it were otherwise, " all agreements for personal service for a fixed period 
would be void. An agreement to serve exclusively for a week, a day, or 
even for an hour, necessarily prevents the person so agreeing to serve from 
exercising his calling during that period for any one else than the person 
Avith whom he so agrees. It can hardly be contended that such an agree- 
ment is void. In truth, a man who agrees to exercise his calling for a 
particular wage and for a certain period agrees to exercise his calling, and 
such an agreement does not restrain him from doing so. To hold otherwise 
would, I think, be a contradiction in terms." Such an agreement may be 
enforced by injunction where it contains a negative clause providing that 
the employee should not carry on business on his own account during the 
term of his engagement(s). Thus in a recent case (f) which arose in 
Zanzibar the defendant agreed to serve the plaintiff, a physician and 
surgeon practising at Zanzibar, as an assistant for three years. The letter 
which stated the terms which the plaintiff offered and the defendant 
accepted contained the words " The ordinary clause against practising must 
be drawn up." No formal agreement was drawn up, and at the end of a 
year the defendant ceased to act as the plaintiff's assistant and began to 
practise in Zanzibar on his own account. It was held that the plaintiff 
was entitled to an injunction restraining the defendant from practising in 
Zanzibar on his own account during the period 0f the agreement. 

Public Policy. In two recent cases it was suggested that, even if the 
section did not apply to cases of partial restraint, they might come under 
ss. 23, 24, of the Act. In Haribhai v. Sharafali (w) Candy, J., said : " I 
would not extend the meaning of s. 27 beyond what the words primarily 

(<?) Oakes % Co. v. JacJtson (1876) 1 Mad. 168, 172 ; Pragji v. Praiyiwan 

Mad. 134. (1903) 5 Bom. L. B. 878. 

(>) 2b. at p. 145. ^ () Charlesworth v. MacDonald (1898) 

00 Charlesworth v. NucDonuld (1898) 23 Bom. 103. See also The 11,-ahniaputra 

23 Bom. 103, 112, 113. See also Specific Tea Co., Ltd. v. Scarth (1885) 11 Cal. 545, 

Itelief Act, s. 57, illustration (d), and 550. 

Subba Xaidu v. IIujl Badsha (1902) 26 (u) (1897) 22 Bom. 861, 873. 



AGREEMENTS IN RESTRAINT OF TRADE. 167 

mean. There may be contracts which do not come within the terms of that S. 27. 
section and its exceptions, and yet may be contracts ' in partial restraint of 
trade/ and as such contrary to public policy and so void (ss. 23, 24, 
Contract Act). That is the common law doctrine by which restraints of 
trade, even though partial, are presumed to be bad (z), the presumption 
being rebuttable. It is for the Court to determine whether the contract 
be a fair and reasonable one or not, and the test appears to be whether it 
be prejudicial or not to the public interest, for it is on grounds of public 
policy alone that these contracts are supported or avoided." And in 
Nur Ali Dubash v. AMul Ali(y) the Court (consisting of Pigot and 
Macpherson, J J.) said : " It is not necessary to consider the effect of s. 24 
of the Contract Act upon the case, whether, even had the stipulation in 
partial restraint of trade not been illegal, the defendant's agreement would 
not nevertheless have been void, part of the consideration for it having been 
the undertaking by the plaintiff absolutely to refrain from carrying on the 
business of dubash. Probably that would be the proper construction of the 
contract." In a Madras case (z) an agreement whereby certain Hindu 
workers in lead bound themselves not to carry on their business with the 
assistance of any persons not belonging to their caste was held to be void. 
The decision was put on the ground that it would be against public policy 
to give effect to the agreement, as it might cause very serious restraint 
upon trade operations. There was no reference either in the judgment or 
argument of counsel to the present section. If there had been, the question 
might have been considered whether the words " any one " are limited to a 
party to the agreement, though in this case the parties already purported 
to restrain themselves to the extent of not employing persons not belonging 
to their caste, however difficult it might 'be to carry on the business 
otherwise. 

These suggestions, however, do not seem sound. The present section 
is very strong ; it invalidates many agreements which are allowed by the 
Common Law ; and it does not seem open to the Courts to hold that any 
agreement inpari materia, not coming within the terms of the section, is 
void on some unspecified ground of public policy. " So far as restraint of 
trade is an infringement of public policy, its limits are defined by section 
27 " (a). 

00 This mode of stating the law is (y) (1892) 19 Cal. 765, 774. 

erroneous. See per Lindley, L.J., in (r) Vaithelinga v. Saminada (1878) 2 

Mills v. Dunham [1891] 1 Ch. 576, 587, a Mad. 44. 

case which apparently was not before the (#) Pet- Jenkins, C. J., in Fraser fy Co. 

learned Judge : " You are to construe the v. The flombay Ice Manufacturing Co. 

contract, and then see whether it is (1905) 29 Bom. 107, at p. 120. 
legal." 



.8 THE INDIAN CONTRACT ACT. 

S. 27. Agreements not in Restraint of Trade. This section aims at 

"contracts by which a person precludes himself altogether either for a 
limited time or over a limited area from exercising his profession, trade, or 
business, not contracts by which in the exercise of his profession, trade, or 
business, he enters into ordinary agreements with persons dealing with him 
which are really necessary for the carrying on of his business " (J). In one 
sense every agreement for sale of goods whether in esse or in posse is 
a contract in restraint of trade, for if A. B. agrees to sell goods to C. D. he 
precludes himself from selling to anybody else. But a reasonable construc- 
tion must be put upon the section, and not one which would render void 
the most common form of mercantile contracts (c). Thus a stipulation in 
an agreement whereby the plaintiffs agreed that they would not sell to 
others for a certain period any goods of the same description they were 
selling to the defendant is not in restraint of trade (d). Similarly 
an agreement to sell all the salt manufactured by the defendant during 
a certain period to the plaintiff at a certain price is not in restraint 
of trade (e). And where A. agreed to purchase certain goods from B. 
at a certain rate for the Cuttack market, and the contract contained 
a stipulation that, if the goods were taken to Madras, a higher rate 
should be paid for them, it was held that the stipulation for the higher 
rate was not in restraint of trade (/). All that the contract comes 
to in such a case is that the vendor is to sell the goods at one price if 
they are sent to Cuttack, but at another price if they are sent for sale 
to Madras. 

Trade combinations. An agreement between manufacturers not to 
sell their goods below a stated price, to pay profits into a common fund 
and to divide the business and profits in certain proportions, is not avoided 
by this section, and cannot be impeached as opposed to public policy 
under s. 23 (#). The question whether an agreement whereby manu- 
facturers agree with one another to carry on their works under special 
conditions, or traders agree amongst themselves to sell their wares at 
a fixed price, is in restraint of trade has frequently arisen in English 
Courts. Such agreements have in some instances been disallowed, and 
in others upheld, according as the restraints were or were not deemed 
to be in excess of what was reasonably sufficient to protect the interests of 



(V) Per Handley, J., in Mackenzie v. Mad. 472 ; Sadagopa Ramanjiuh v 

Striramiah (1890) 13 Mad. 472, 475. Mackenzie (1891) 15 Mad. 79. 

(f) Ib. at p. 474. (/) Prem Sook v. Dlnirum Chand 

(<f) Carlisle*, Nephews 8f Co. v. Rick- (1890) 17 Cal. 320. 

nmitk Bucktearmull (1882) 8 Cal. 809. O/) Fraser $ Co. v. Bombay Ice Manu- 

(e) Mackenzie v. Striramiah (1890) 13 facturhifj Co. (1904) 29 Bom. 107. 



TRADE COMBINATIONS. 169 

the parties concerned. Agreements of this description do not appear to be S. 27. 
common in India, and, so far as we are aware, there are only two 
Indian decisions, both of the Bombay High Court, in which the ques- 
tion, though raised, was not decided. In the first of these cases the 
owners of four ginning factories, with a view to prevent competition 
amongst them, entered into an agreement which provided inter alia that 
they should charge a uniform rate of Es. 4-8 per palla of cotton to be 
ginned, and that they should treat Es. 2-8 of that sum as the actual 
cost of ginning, and that the remaining Es. 2 should be carried to a 
common fund which was to be divided each year between them in propor- 
tion to the number of gins which each of them possessed. The agreement 
was to continue in force for four years. The other parties carried out the 
agreement, but the defendant, though he had credited the Es. 2 to a 
separate account, refused to pay the plaintiff his share of the amount. 
The plaintiff sued the defendant to recover his share. The defendant con- 
tended that the agreement was in restraint of trade and was therefore not 
enforceable. The Court held that the plaintiff was entitled to recover his 
share from the defendant. Farran, C.J., thought that the stipulation that 
the parties should not charge more than Es. 4-8 per palla was in restraint 
of trade. Candy, J., however, was inclined to the contrary view. The 
decision was put on the ground that the only agreement sought to be 
enforced in the suit was the agreement to divide the profits, which was 
perfectly lawful, and that there was no question in the suit to enforce any 
of the covenants alleged to be in restraint of trade (K). In the subsequent 
case of Fraser & Co. v. The Bombay Ice Manufacturing Co. (i) Sir 
Lawrence Jenkins, C.J., expressed a decided opinion that a stipulation 
restraining the parties to a combination agreement from selling ice manu- 
factured by them at a rate lower than the rate fixed in the agreement was 
not void under this section. The learned judge said : " The scheme of the 
agreements was no doubt to limit competition and keep up prices ; but 
that does not necessarily bring them within, the terms of section 27: to 
succeed in the defence under that section, Frasers [the defendants, who 
had refused to abide by the agreement] must establish that the present 
suit is one to enforce an agreement whereby some one is restrained from 
exercising a lawful profession, trade, or business of any kind " (k). In that 
case four ice manufacturing companies in Bombay, with a view to prevent 
competition among them, entered into an agreement which provided inter 
alia that they should not sell ice manufactured by them for less than Es. 58 



(/() Ifaribhai MamTdal v. SluirafaU (0 (1905) 29 Bom. 109. 

Isabji (1897) 22 Bom. 861. (*) lb., pp. 118119. 



'0 THE INDIAN CONTRACT ACT. 

S. 27. per ton, that the cost of manufacturing ice should be taken at Rs. 17-8 
per ton, and that the difference between the selling price and the cost price 
should be brought into a general fund for the benefit of all of them. The 
agreement was entered into in March, 1902, and it was to'remain in force 
up to 31st December, 1903. In May, 1902, Messrs. Fraser and Co., one 
of the contracting parties, wrote to the others stating that the agreement 
was of no binding force, and that from 1st June next they would commence 
to sell ice at Us. 22-8 per ton. Thereupon, in July, 1902, the other parties 
brought a suit against Fraser and Co. for an injunction restraining them 
from selling ice to any person at any lower rate than the agreed rate, and 
to recover from them the amount payable by them to the general fund in 
pursuance of the agreement. Unlike the preceding case, therefore, the 
suit was to enforce the stipulation that none of the parties should sell for 
less than the agreed rate. Thus the question arose whether the stipulation 
was void under the present section, but it was not decided, as the period of 
the agreement expired during the pendency of the suit : the Court, how- 
ever, expressed the opinion above stated, in favour of its validity. That 
part of the agreement which provided for contribution to the general fund 
was held to be perfectly valid and enforceable. It may be rather a nice 
question whether agreements which do not restrain a man altogether, while 
(they last, " from exercising a lawful profession, trade, or business," but only 
restrain, as in the case last mentioned, the manner in which it shall be 
exercised, are within this section or not. There is English authority for 
holding such agreements to be in restraint of trade (I). But the present 
section certainly does not reproduce the Common Law, as we have seen. 
It would seem, therefore, that it should be construed according to its literal 
terms. When so construed, we submit that it only strikes at agreements 
which operate as a total bar to the exercise of a lawful business, for however 
short a period or however limited the area, and does not avoid agreements 
which merely restrain freedom of action in detail in the actual exercise of a 
lawful business. The stipulation not to gin cotton or to sell ice for less 
than a fixed rate is an agreement of this character. It does not restrain 
any party to the contract from ginning cotton or from selling ice ; in other 
words, none of the parties is restrained from exercising his business of 
ginning cotton or selling ice. What it does provide for is that in the 
exercise of the business certain terms shall be observed. 

Lex loci contractus. The Courts of this country will not enforce a 
contract made abroad, to be performed in this country, contrary to the 
policy of the law of this country. An agreement, therefore, in restraint of 



(I) IFilton v. Ecltersley (1856) 6 E. & B. 66. 



RESTRAINT OF TRADE. 171 

trade, made abroad and to be performed in India, is void in India, though S. 27. 
it may be valid by the lex loci contradus (m). 

Exception 1. This exception deals with a class of cases which had a 
leading part in causing the old rule against agreements in restraint of trade 
to be relaxed in England. The rule arose apparently from a popular 
dislike of all combinations tending to raise prices, which may be compared 
with the recent agitation in America against the modern system of "trusts." 
It has been laid down in quite modern cases, as the governing principle, 
that "no power short of the general law," not even the party's own 
bargain, should be allowed to restrain a man's discretion as to the manner 
in which he shall carry on his business (n) ; and originally the rule was 
without exceptions. " In time, however, it was found that a rule so rigid 
and far-reaching must seriously interfere with transactions of every-day 
occurrence " (0) ; and from the early part of the sixteenth century onwards 
restrictions " for a time certain and in a place certain," to prevent 
the seller of a business from competing with the buyer, were allowed. 
In the nineteenth century it was settled that a limit of time was 
not necessary, and contracts for the preservation of trade secrets were 
held to be outside the rule altogether ; and finally the House of Lords 
has declared that there is no hard and fast rule at all. The question 
is always whether the restraint objected to is reasonable with refer- 
ence to the particular case and not manifestly injurious to the public 
interest (p). 

The law of British India, however, is tied down by the language of this 
section to the principle, now exploded at home, of a hard and fast rule 
qualified by strictly limited exceptions ; and, however mischievous the 
economical consequences may be. the Courts here can only administer the 
Act as they find it. 

The kind of cases covered by this exception may be illustrated by 
a decision some years earlier than the Act. A covenant by the defen- 
dants on the sale of the goodwill of their business of carriers to the 
plaintiff not to convey passengers to and fro on the road between 
Ootacamund and Mettapolliem was not in restraint of trade. " So 
partial a restraint is not really adverse to the interests of the public at 
large (g). 

(iii) Oaltes $ Co. v. Jackson (1876) 1 of the common law. 

Mad. 134, 144. (p) Nordenfelt v. Maxlm-Nordenfelt 

O) Hilton v. Krlt-e.rdey (1856) 6 E. & Guns and Ammunition Co. [1894] A. C. 

B. 66, 74. 535. 

0) Lord Macnaghten in NorAe.nfelVa (>/) Aucliterlonle v. Charles Hill (1868) 

Case [1894] A. C. 535, 564 ; see his judg- 4 M. H. C. 77. 
ment at large for a full critical discussion 



172 THE INDIAN CONTRACT ACT. 

Ss. 27, 28. Exceptions 2 and 3. Agreements between partners of the kind 

recognised (though inadequately) by these exceptions have been allowed in 
England ever since there has been any settled partnership law, and are 
exceedingly common ; indeed, some such clause is rarely absent from 
partnership articles. 

28. Every agreement, by which any party thereto is 
restricted absolutely from enforcing his rights 

Agreements in 

restraint of legal under or in respect of any contract, by the 

proceedings void. 111 -i -i 

usual legal proceedings in the ordinary 
tribunals, or which limits the time within which he may 
thus enforce his rights, is void to that extent. 

Exception 1. This section shall not render illegal a 
savingof contract contract b y which two or more persons agree 
tiOTMKs ^te r that lr *^at anv dispute which may arise between 
may arise. them in respect of any subject or class of 

subjects shall be referred to arbitration, and that only the 
amount awarded in such arbitration shall be recoverable in 
respect of the dispute so referred. 

When such a contract has been made, a suit may be brought 

Suit, barred by f or its specific performance, and if a suit, other 

than for such specific performance, or for the 

recovery of the amount so awarded, is brought by one party to 

such contract against any other such party in respect of any 

subject which they have so agreed to refer, the existence of such 

contract shall be a bar to the suit. 

[Repealed by Specific Relief Act, except in scheduled districts where 
that Act is not in force.] 

Exception 2. Nor shall this section render illegal any 
saving of con- contract in writing, by which two or more 
tions thafhavT* P ers ns agree to refer to arbitration any ques- 
aiready arisen. ^ on between them which has already arisen, 
or affect any provision of any law in force for the time being 
as to references to arbitration. 

Scope of the section. " This section does not apply to contracts which 
merely contain a provision for referring disputes to arbitration, but to those 



RESTRAINT OP LEGAL PROCEEDINGS. 173 

which wholly or partially prohibit the parties from having recourse to a court S. 28. 
of law. If, for instance, a contract were to contain a stipulation that no action 
should be brought upon it, that stipulation would, under the first part of s. 28, 
be void, because it would restrict both parties from enforcing their rights 
under the contract in the ordinary legal tribunals ; and so, if a contract 
were to contain a double stipulation that any dispute between the parties 
should be settled by arbitration, and that neither party should enforce 
his rights under it in a court of law, that would be a valid stipulation so 
far as regards its first branch, viz., that all disputes between the parties 
should be referred to arbitration, because that of itself would not have the 
effect of ousting the jurisdiction of the Courts ; but the latter branch of 
the stipulation would be void, because by that the jurisdiction of the 
Court would be necessarily excluded " (r). Thus a contract whereby it is 
provided that all disputes arising between the parties should be referred to 
two competent London brokers, and that their decision should be final t 
does not come within the purview of this section (.s). Nor does a contract 
whereby it is provided that all disputes arising between the parties" should 
be referred to the arbitration of the Bengal Chamber of Commerce, whose 
decision shall be accepted as final and binding on both parties to the 
contract " (). But a stipulation that parties to a reference shall not 
object at all to the validity of the award on any ground whatsoever before 
any court of law does restrict a party absolutely from enforcing his rights 
in ordinary tribunals, and, as such, is void. The Courts have power, in 
spite of such a stipulation, to set aside an award on the ground of miscon- 
duct on the part of the arbitrator. It was so held by the Madras High 
Court in a case (u) in which the agreement to submit to arbitration contained 
a restrictive stipulation of the above character. The agreement in that 
case was filed in Court under the provisions of s. 523 of the Code of Civil 
Procedure, 1882 (x), and the decision was put on the ground that the very 
filing of the agreement in Court gave the Court jurisdiction under the 
arbitration chapter to set aside the award on the ground of the arbitrator's 
misconduct (y}. But the decision, it is submitted, ought not to be different 
even if the agreement were not filed in Court. For though, in that 
case, the provisions of the Code would not apply, the award may be set 
aside in a regular suit on that ground. And the same may now be done 

(r) Per Garth, C. J., in The Coringa Oil (u) Burla Ranga Reddi v. Kalapalli 

Co., Ltd. v. Koegler (1876) 1 Cal. 466, Sithaya (1883) 6 Mad. 368. 

468, 469, in appeal from same case in 1 (a;) See now Code of Civil Procedure, 

Cal. 42. 1908, Sched. II., cl. 17. 

00 -ft- (y) See ss. 524 and 521 of the Civil 

(f) Ganges Manufacturing Co., Ltd. v. Procedure Code, now Sched. II., els. 19 

Indra Chand (1906) 33 Cal. 1169. and 15. 



174 THE INDIAN CONTRACT ACT. 

S. 28. under the provisions of the Indian Arbitration Act IX of 1899 in those 
places where the Act applies (z). A party to a submission has the right to 
have an award set aside on the ground of misconduct on the part of the 
arbitrator, and a stipulation whereby he binds himself to accept the award 
as final in all cases has the effect of restricting him absolutely from 
enforcing his right, and is, therefore, void under the provisions of this 
section. 

For the rest, the section before us affirms the Common Law. Its 
provisions " appear to embody a general rule recognised in the English 
Courts which prohibits all agreements purporting to oust the jurisdiction 
of the Courts "(a). It does not affect the validity of compromises of 
doubtful rights, and this view is supported by the provisions of the Civil 
Procedure Code, which enable parties to a suit to go before the Court and 
obtain a decree in terms of a compromise (b). In a case before the 
Contract Act was passed, it was held by the Privy Council that an agreement 
whereby the parties to a suit bind themselves before judgment is passed in 
the Court of first instance to abide by the decree of that Court and forego 
their right of appeal is valid and binding (c). Following the principle 
of this decision, it was held by a full Bench of the Allahabad High Court (<1) 
that an agreement whereby a judgment debtor engaged himself not to 
appeal against a decree passed against him in consideration of the judg- 
ment creditor giving him time for the satisfaction of the judgment debt is 
not prohibited by this section. " By the agreement not to appeal, for 
which the indulgence granted by the respondents was a good consideration, 
the appellant did not restrict himself absolutely from enforcing a right 
under or in respect of any contract. He forewent his right to question in 
appeal the decision which had been passed by an ordinary tribunal. Such 
an agreement is in our judgment prohibited neither by the language nor 
the spirit of the Contract Act, and an Appellate Court is bound by the 
rules of justice, equity, and good conscience to give effect to it and to 
refuse to allow the party bound by it to proceed with the appeal " (e). 

"Rights under or in respect of any contract." The expression 
" contract " does not include rights under a decree (/). The Code of Civil 
Procedure contains express provisions as to adjustment of a decree and 

(z) See ss. 2 and 14. dure Code, 1908, Order 23, r. 3. 

(a) Anattt Das v. Axhburner fy Co. (c) Mnnshi Amir All v. Maharani 

(1876) 1 All. 267. See also Kistiiasammy Inderjit Koer (1871) 9 B. L. K. 460. 

Plllay v. The Municipal Commissioners (d~) Anant Das v. Ashburtier $ Co. 

for the Town of Madras (1868) 4 M. H. C. (1876) 1 All. 267. 

120, 123. (e) lb. at p. 269. 

(*) Anant Das v. Ashburner # Co. (/) Ramghwlain v. Jariki Rai (1884) 

(1876) 1 All. 267. See also the Civil Proce- 7 All. 124, 131. 



RESTRAINT OF LEGAL PROCEEDINGS. 175 

postponement of rights under a decree by mutual agreement of parties to a S. 28. 
suit (see order 21, rule 2). 

Limitation of time to enforce rights under a contract. Under the 
provisions of this section, an agreement which provides that a suit should 
be brought for the breach of any terms of the agreement within a time 
shorter than the period of limitation prescribed by law is void to that 
extent. The effect of such an agreement is absolutely to restrict the 
parties from enforcing their rights after the expiration of the stipulated 
period, though it may be within the period of limitation. No provision 
is made in the section for agreements extending the period of limitation 
for enforcing rights arising under it. In a case before the Judicial 
Committee (g) their Lordships expressed their opinion that an agreement 

that, in consideration of an inquiry into the merits of a disputed claim, 
advantage should not be taken of the Statute of Limitations in respect of 
the time employed in the inquiry is no bar to the plea of limitation, though 
an action might be brought for breach of such an agreement. The action 
would be one apparently for damages, and the recognition of the right to 
bring such an action is inconsistent with the view that the agreement is 
void, that is, not enforceable by law (s. 2 (g) ). It is submitted that an 
agreement which provides for a longer period of limitation than the law 
allows does not lie within the scope of this section. Such an agreement 
certainly does not fall within the first branch of the section. There is no 
restriction imposed upon the right to sue ; on the contrary, it seeks to 
keep the right to sue subsisting even after the period of limitation. Nor 
is this an agreement limiting the time to enforce legal rights. It might be 
argued, however, that it is void under s. 23, as tending to defeat the pro- 
visions of the Statute of Limitations. But this does not seem consistent 
with the policy of the rule allowing validity, subject to conditions of form, 
to promises to pay time-barred debts (s. 25 (3), above). 

" Ordinary Tribunals." A clause in a bill of lading whereby it was 
agreed that questions arising on the bill should be heard by the High Court 
of Calcutta instead of the Court at Mirzapur, which was the proper 
tribunal to try the questions, is void, and cannot be pleaded in bar of a 
suit brought in the Mirzapur Court (K). 

Exception 1. This exception " applies only to a class of contracts 
where (as in cases of Scott v. Avery(i] and Tredwen v. Holman (Jc), cited by 
Phear, J. (I) ) the parties have agreed that no action shall be brought 

(g) The East India, Co. v. Odtichurn (0 (1855) 5 H. L. C. 811. 

Paul (1849) 5 M. I. A. 43, 70. (k) (1862) 1 H. & C. 72. 

(/<) Craidey v. Luclimee Ram (1866) 1 (I) In Kocgler v. The Connga Oil Co. 

Agra, 129. Ltd. (1875) 1 Cal. 42, 51. 



176 THE INDIAN CONTRACT ACT. 

g gg until some question of amount has first been decided by a reference, as, 
for instance, the amount of damage which the. assured has sustained in a 
marine or fire policy. Such an agreement does not exclude the jurisdiction 
of the Courts ; it only stays the plaintiff's hand till some particular amount 
of money has been first ascertained by reference " (m). An agreement 
between a tramway company and a conductor that the manager of the 
company shall be the sole judge as to the right of the company to retain 
the whole or any part of the deposit to be made by the conductor as 
security for the discharge of his duties, and that his certificate in respect 
of the amount to be retained shall be conclusive evidence between the 
parties in Courts of justice, comes within this exception. Such an agree- 
ment does not oust the jurisdiction of the Courts. Its effect is merely to 
constitute the manager the sole arbitrator between the company and the 
conductor as to whether, in the event of the conductor's misconduct, the 
company is entitled to retain the whole or any part of the deposit. The 
point is very similar to those which so frequently pccur in England, where 
an engineer or architect is constituted the arbitrator between a contractor 
and the person who employs him as to what should be allowed in case of 
dispute for extras or penalties (n). It must not be supposed that the use 
of such terms as " sole judge " necessarily imposes any duty of proceeding 
in a quasi -judicial manner. 

This class of cases must be distinguished from those where the obliga- 
tion of a promisor, such as the duty of paying for work to be done or 
goods to be supplied, is made, by the terms of the contract, to depend on 
the consent or approval of some person, as, in a builder's contract, the 
certificate of the architect that the work has been properly done. Here 
there is no question of referring to arbitration, or anything like arbitration, 
a dispute subsequent to the contract, but the contract itself is conditional, 
or, in the language of the Act, contingent (ss. 31 36, below). 

Exception 1, Second Clause. This clause was repealed by the Specific 
Relief Act. S. 21 of that Act provides that, " save as provided by the Code 
of Civil Procedure, no contract to refer a controversy to arbitration shall 
be specifically enforced ; but if any person who has made such a contract, 
and has refused to perform it, sues in respect of any subject which he has 

(/) Per Garth, C.J., in The Coringa Oil Kuppusami Naidu v. Smith $ Co. (1895) 

Co., Ltd. v. Koegler (1876) 1 Cal. 466, 469 ; 19 Mad. 178 ; and see Perry v. Liverpool 

Cooverjl v.* Bhlmji (1882) 6 Bom. 528, Malt Co. [1900] 1 Q. B. 339, C. A. ; as to 

536. the immunity of the person appointed a 

() Aghore Nauth Bannerjee v. The quasi-arbitrator from being sued for 

Calcutta Tramways Co., Ltd. (1885) 11 negligence, C/tambersv. Goldthorpe [1900] 

Cal. 232, following London Tramways Co. 1 K. B. 624, C. A. 
v. Bailey (1877) L. K. 3 Q. B. D. 217; 



RESTRAINT OF LEGAL PROCEEDINGS. 177 

contracted to refer, the existence of such contract shall bar the suit." If a Ss. 28, 29. 
suit is brought in respect of any such subject, it must be shown by the 
defendant, before he could rely upon the section as a bar to the suit, that 
the agreement is still operative (0), and that the plaintiff has refused to 
perform it. The mere act of filing the plaint is not such a refusal (p). 

Remedies for breach of agreement to refer. There are three remedies 
open to a party to a reference for breach of the agreement. He may sue 
for damages for the breach, or he may have the agreement specifically per- 
formed in the manner provided by the Code of Civil Procedure (q), or he 
may plead the agreement in bar of any suit that may be brought against 
him in violation of the terms of the agreement, as provided by the Specific 
Relief Act, s. 21. But the provisions of the code and of the Specific Relief 
Act are repealed by the Indian Arbitration Act (r), and they have no opera- 
tion wherever that Act applies (s). Both these remedies, however, are still 
available, but in a somewhat different form, under the provisions of the 
Arbitration Act. 

Conventional restrictions of Evidence. An agreement purporting to 
prevent the ordinary evidence of payment between the parties from being 
received has been disregarded as being an unwarrantable interference with 
the jurisdiction of the Court. Where a bond contained a stipulation 
enabling the obligee to treat as a nullity payments not endorsed in writing 
on the bond, it was held that the stipulation was against good conscience 
and did not preclude the obligor from proving payments alleged to have 
been made by him by oral evidence (/). Such a stipulation " cannot be 
permitted to control Courts of justice as to the evidence which, keeping 
within the rules of the general law of evidence in this country, they may 
admit of payments. There is nothing in that law which would warrant 
our Courts in excluding direct oral evidence of payment." 

Agreements void 29. Agreements, the meaning of which 

for uncertainty. - g no cer t, a i n) or capable of being made 

certain, are void. 

Illustrations. 

(a) A. agrees to sell to B. "a hundred tons of oil." There is 
nothing whatever to show what kind of oil was intended. The 
agreement is void for uncertainty. 

0) Takal Y. Bisliesliar (1885) 8 All. (q) See Sched. II. cl. 17, 19. 

57 ; Slieoamlar v. Deodat (1886) 9 All. (/) See s. 3 of the Act. 

168, 172. (*) See s. 2 of the Act. 

(p) Xoomud Chunder Dass v. Ckunder () Narayan Undlr Patil v. Motila 

Kant Mookerjee (1879) 5 Cal. 498 ; TaUcd Jlamdas (1875) 1 Bom. 45. 
v. Jiifskeahar (1885) 8 All, 57, 

i.c, 12 



178 THE INDIAN CONTRACT ACT. 

g t 29. (b) A. agrees to sell to B. one hundred tous of oil of a specified 

description, known as an article of commerce. There is no uncertainty 
here to make the agreement void. 

(c) A., who is a dealer in cocoanut-oil only, agrees to sell to B. 
" one hundred tons of oil." The nature of A.'s trade affords an indica- 
tion of the meaning of the words, and A. has entered into a contract 
for the sale of one hundred tons of cocoanut-oil. 

(d) A. agrees to sell to B. "all the grain in my granary at 
Eamnagar." There is no uncertainty here to make the agreement void. 

(e) A. agrees to sell to B. "one thousand maunds of rice at a price 
to be fixed by C." As the price is capable of being made certain, there 
is no uncertainty here to make the agreement void. 

(f) A. agrees to sell to B. " my white horse for rupees five hundred 
or rupees one thousand." There is nothing to show which of the two 
prices was to be given. The agreement is void. 



Ambiguous contracts. The text and (with one addition) the illustra- 
tions of this section follow the draft of the Indian Law Commissioners with 
only formal variation. As the illustrations are plain, and sufficient to 
explain the meaning of the section, it seems useless to add others from 
English decisions. 

S. 93 of the Evidence Act provides that when the language of a docu- 
ment is ambiguous or defective no evidence can be given to explain or 
amend the document. See also ss. 94 97 of the same Act. Neither will 
the Court undertake to supply defects or remove ambiguities according to 
its own notions of what is reasonable ; for this would be not to enforce a 
contract made by the parties, but to make a new contract for them. The 
only apparent exception to this principle is that when goods are sold 
without naming a price, the bargain is understood to be for a reasonable 
price (see s. 89, p. 374, below). This was probably introduced in England 
on the assumption that there was an ascertain able market price, and then 
extended to all cases. 

. S. 21 of the Specific Relief Act provides that a contract of which the 
Court cannot find the terms with reasonable certainty cannot be specifically 
enforced. The provisions of Chap. Ill of that Act for the rectification of 
instruments in which a real agreement of the parties has been erroneously 
expressed apply, of course, only to cases where the real agreement can be 
judicially ascertained. They are taken from some of the worst penned 
clauses of the New York draft Civil Code, but, as the elementary principles 
of equity are happily still known in the High Courts, it does not appear 
that any great harm has been done (). 

(w) See Pollock, Tagore Lectures on Fraud, etc., in British India, 118124. 



AMBIGUOUS CONTRACTS. 179 

Where the defendants, describing themselves as residents of a certain Ss. 29, 30 
place, executed a bond and hypothecated as security for the amount " our 
property, with all the rights and interest " (#), it was held that the 
hypothecation was too indefinite to be acted upon. The mere fact that 
the defendants describe themselves in the bond as residents of a certain 
place is not enough to indicate their property in that place as the property 
hypothecated. If they had described themselves as the owners of certain 
property it would then have been reasonable to refer the indefinite 
expression to the description (y). And where the defendant passed a 
document to the Agra Savings Bank whereby he promised to pay to the 
manager of the bank the sum of Rs. 10 on or before a certain date " and 
a similar sum monthly every succeeding month," it was held that the 
instrument could not be regarded as a promissory note (z), as it was 
impossible from its language to say for what period it was to subsist and 
what amount was to be paid under it (a). Similarly it has been held that 
a stipulation in a,patta (lease) whereby the tenant agreed to pay whatever 
rent the landlord might fix for any land not assessed which the tenant 
might take up (presumably without permission) is void for uncertainty. 
Under such &patta, the landlord might fix any rent he liked, and the tenant 
might be liable for an unreasonable rent beyond the value of the land (V). 
But where the proprietor of an indigo factory mortgaged to B. all the 
indigo cakes that might be manufactured by the factory from crops to be 
grown on lands of the factory from the date of the mortgage up to the date 
of payment of the mortgage debt, it was held that the terms of the 
mortgage were not vague, and that the mortgage was not void in law (c). 

30. Agreements by way of wager are void ; and no 

Agreements by snit sna11 be brought for recovering anything 

way of wager void. a u e g e ^ to be won on any wager, or entrusted 

to any person to abide the result of any game or other 

uncertain event on which any wager is made. 



(^) The original words were hakiyat to the order of, a certain person, or to the 

ajme Ml haq haquk. bearer of the instrument. See Negotiable 

(y) Deojit v. Pltanibar (1870) 1 All. Instruments Act XXVI of 1881, s. 4. 

975. (a) Carter v. The Agra Savings Sank 

(c) A promissory note is an instrument (1883) 5 All. 562. 

in writing (not being a bank note or a (i) Ramasami v. Eajagopala (1887) 11 

currency note) containing an uncondi- Mad. 200. 

tional undertaking signed by the maker - (c) Baldeo Parsluid v. Miller (1904) 

to pay a certain sum of money only to, or 31 Cal. 667, 676 678. 

122 



180 THE INDIAN CONTRACT ACT. 

S. 30. This section shall not be deemed to render unlawful a 

Exception in subscription or contribution, or agreement to 

priSfor ^ora" subscribe or contribute, made or entered into 

racing - for or toward any plate, prize or sum of money, 

of the value or amount of five hundred rupees or upwards, 

to be awarded to the winner or winners of any horse-race. 

Nothing in this section shall be deemed to legalize any 

transaction connected with horse-racing, to 

Section 294A of . . . . 

the Indian Penal which the provisions of section 294A of the 

Code not affected. . 

Indian Penal Code apply. 

Wagering contracts. This section represents the whole law of 
wagering contracts now in force in British India, supplemented in the 
Bombay Presidency by Act III of 1865. Prior to the enactment of the 
Contract Act the law relating to wagers was embodied in Act XXI of 1848 
(an Act for avoiding wagers). That Act was based principally on the 
English Gaming Act of 1845 (8 & 9 Viet. c. 109), s. 18, and it was 
repealed by the Contract Act (see the schedule to the Act). Before the 
passing of Act XXI of 1848 the law relating to wagers in force in British 
India was the common law of England. By that law an action might be 
maintained on a wager, if it was not against the interest or feelings of 
third persons, did not lead to indecent evidence, and was not contrary to 
public policy (d). 

There is no technical objection to the validity of a wagering contract. 
It is an agreement by mutual promises, each of them conditional on the 
happening or not happening of an unknown event. So far as that goes 
promises of this form will support each other as well as any other reciprocal 
promises. It would have been better if the Courts in England had refused, 
on broad grounds of public policy, to admit actions on wagers ; but this 
did not occur to the Judges until such actions had become common ; and, 
until a remedy was provided by statute, they could only find reasons of 
special public policy in special cases, which they did with almost ludicrous 
ingenuity (e). 

What is a Wager ? A wager has been defined as a contract by A. to 
pay money to B. on the happening of a given event, in consideration of B. 

(d) Bamloll T/iackoorseydass v. Soo- M. I. A. 251. 

ju in null Dhondmull (1848) 4 M. I. A. 339 ; (e) Pollock, Contract, 7th ed. 313 ; and 

Doolubdass Pettamberdass v. Ramloll see for the history of English legislation 

llnirliuorse.ijduts (1850) 5 M. I. A. 109; Anson, llth ed. 209 sqq. 
Rughoonauth v. ManicMiund (1856) 6 



WAGERING CONTRACTS. 



181 



paving [this should be " promising to pay "] to him money on the event 
not happening (/). But Sir "William Anson's definition, " a promise to 
give money or money's worth upon the determination or ascertainment of 
an uncertain event," is neater and more accurate. " To constitute a wager 
' the parties must contemplate the determination of the uncertain event ' 
on which the risk depends ' as the sole condition of their contract. One 
may thus distinguish a genuine wager from a conditional promise or a 
guarantee': Anson, Law of Contract [llth ed. 207]. But if one of the 
parties has ' the event in his own hands,' the transaction lacks an essential 
ingredient of a wager " (</). " It is of the essence of a wager that each side 
should stand to win or lose according to the uncertain or unascertained 
event in reference to which the chance or risk is taken " (Ji). 

In Alamai v. Positive Government Security Life Assurance Co., Ltd. (i), 
a case of life insurance, Fulton, J., said : " What is the meaning of the 
phrase ' agreements by way of wager ' in s. 30 of the Contract Act ? . . . 
Can it be that the words mean something different in India from what the 
corresponding words ' agreements by way of wagering ' mean in England ? 
I do not see how such an argument can be maintained, or how the fact that 
14 Geo. III. c. 48 is not in force in India affects the question. In 
Hampden v. Walsh (&), Cockburn, C. J., defined a wager as a contract by A. 
to pay money to B. on the happening of a given event in consideration of 
B. paying money to him on the event not happening, and said that since 
the passing of 8 & 9 Viet. c. 109 there is no longer as regards action any 
distinction between one class of wager and another, all wagers being made 
null and void at law by the statute. In Thacker v. Hardy (/), Cotton, L. J., 
said that the essence of gaming and wagering was that one party was to win 
and the other was to lose upon a future event, which at the time of the 
contract was of an uncertain nature ; but he also pointed out that there 
were some transactions in which the parties might lose and gain according 
to the happening of a future event which did not fall within the phrase. 
Such transactions, of course, are common enough, including the majority 
of forward purchases and sales. 

" A certain class of agreements such as bets, by common consent, 
come within the expression 'agreements by way of wagers.' Others, such 
as legitimate forms of life insurance, do not, though, looked at from one 

(/) Hampden v. Walsh (1876) 1 Q. B. (1885) 9 Bom. 358, 363. 



I S. 30. 



D. 189, 192. See also per Lord Brampton 
in Curlill v. Carbolic Smoke Ball Co. 
[1892] 2 Q. B. 484, 490, and Anson, llth 
ed. 206. 

(g) Per Birdwoocl, J., in Dayabhai 
Trilkorandas v. Lulthmiehand Panachand 



(A) Per Jenkins, C.J., in Sassoon v. 
Toltersey (1904) 28 Bom. 616, p. 621. 
(i) (1898) 23 Bom. 191. 
(A) (1875) 1 Q. B. D. 189. 
(1) (1878) 4 Q. B. D. 685, 695. 



182 



THE INDIAN CONTRACT ACT. 



S. 30. point of view, they appear to come within the definition of wagers. The 
distinction is doubtless rather subtle, and probably lies more in the intention 
of the parties than in the form of the contract (m). In such doubtful cases 
it seems to me that the only safe course for the Courts in India is to follow 
the English decisions, and that when a certain class of agreement has 
indisputably been treated as a wagering agreement in England it ought to 
receive the same treatment in India " (n). 

" By way of wager." There is no distinction between the expression 
" gaming and wagering," used in the English Act and the Act of 1848, 
and the expression " by way of wager," used in this section (o). The 
cases (p), therefore, bearing on the expression used in those Acts are still 
useful in construing the expression " by way of wager," used in the present 
section. 

Wagering contracts may assume a variety of forms, and a type with 
which the Courts have constantly dealt is that which provides for the pay- 
ment of differences^) in stock transactions, with or without colourable 
provisions for the completion of purchases. Such provisions, if inserted, 
will not prevent the Court from examining the real nature of the agreement 
as a whole (r). " In order to constitute a wagering contract neither party 
should intend to perform the contract itself, but only to pay the differ- 
ences " (s). It is not sufficient if the intention to gamble exists on the 
part of only one of the contracting parties. " Contracts are not wagering 
contracts unless it be the intention of loth contracting parties at the time 
of entering into the contracts under no circumstances to call for or give 
delivery from or to each other " (#). It is not necessary that such intention 
should be expressed. "If the circumstances are such as to warrant the 
legal inference that they never intended any actual transfer of goods at all, 



(?H) " It is the fact that one wagering 
contract is and the other is not permitted, 
by law which makes the distinction 
between the two " : Anson, p. 208, llth ed. 

(.) See Trimble v. Hill (1879) 5 App. 
Ca. 342 ; and Kathama Natchiar v 
Doi-aslngu (1875) L. R. 2 Ind. Ap. 169, 186. 

(o) Kong Yee Lime $ Co. v. Louyee 
Nanjee (1901) 29 Cal. 461, L. R. 28 Ind. 
Ap. 239. 

(l>) See especially The Universal Stock 
Exchange, Ltd. v. Strachan [1896] A. C. 
166, and In re Gieve [1899] 1 Q. B. 794, 
both decided under the English Act of 
1845. 

(^) Doshi TalaJishi v. Shah Ujamsi 



Vein (1889) 24 Bom. 227, 229. 

(/) He Gieve [1899] 1 Q. B. 794, C. A. 

00 Perosha v. Manekji (1898) 22 Bom. 
899, 903 ; The Universal Stock Excliange 
v. Strachan [1896] A. C. 166; Eshoor 
Doss v. Venltatambba JRau (1895) 18 
Mad. 306. 

(t) J. H. Tod v. LaWimidas (1892) 16 
Bom. 441, 445, 446 ; Ajudhia Prasad v. 
Lalman (1902) 25 All. 38 ; Sassoon v. 
Tohersey (1904) 28 Bom. 616 ; Motilal v. 
Govindram (1905) 30 Bom. 83; Httrmnk/t- 
rai v. Narotamdaas (1907) 9 Bom. L. R. 
125 ; Kemrlchand v. Menvanjee (1899) 1 
Bom. L. R. 263. 



WAGERING CONTRACTS. 183 

but only to pay or receive money between one another according as the S. 30. 

market price of the goods should vary from the contract price at the given 

time, that is not a commercial transaction, but a wager on the rise or fall 

of the market." This was laid down by the Judicial Committee in Kong 

Yee Lone & Co. v. Loiujee Nanjee(u] on appeal from the Court of the 

Recorder of Rangoon. The plaintiff in that case was a rice trader ; the 

defendants were rice millers, having a small mill capable of putting out 

30,000 bags in a month. During seven weeks in June, July, and August, 

1899, the defendants entered into several contracts with the plaintiff for 

the sale to him of 199,000 bags of rice at various prices, aggregating 

upwards of five crores of rupees, and the latest delivery was to be on 

7th October, 1899. The rice was to be delivered from amongst a number 

of specified mills, in which the defendants' mill was not included. In the 

same year by fourteen contracts, ranging in time from January to the end 

of August, the defendants sold to the plaintiff 22,250 bags of rice, to be 

delivered from the defendants' mill. The latter contracts were all duly 

fulfilled by delivery and payment. None of the former contracts were 

performed, and the defendants passed to the plaintiff a promissory note 

for "difference on rice." In a suit upon the note it was held by the 

Recorder of Rangoon that there was no common intention to wager, and 

that the plaintiff was entitled to succeed. The judgment was reversed 

by the Judicial Committee on appeal, on the ground that the consideration 

for the note was a number of wagering contracts within the meaning of 

the present section. Their Lordships observed: "Now the output of 

the firm itself would not be much over 60,000 bags during the currency 

of the contracts ; and they (defendants) had dealings with other persons 

besides the plaintiff. The capital of the firm as stated was a trifle more 

than a lac of rupees. The cost of the goods would be that amount 

multiplied five hundredfold. It is possible for traders to contemplate 

transactions so far beyond their basis of trade, but it is very unlikely. In 

point of fact, they never completed, nor were they called on to complete, 

any one of the ostensible transactions. The rational inference is that 

neither party ever intended completion. When the two classes of contracts 

are compared, the one class suitable to traders, such as the defendants, 

and fulfilled by them, the other extravagantly large and left without any 

attempt at fulfilment, the rational inference is strengthened into a moral 

certainty." Similarly in Doshi TalaTcshi v. Shah Ujamsi Velsi (x) certain 

contracts were entered into in Dholera for the sale and purchase of Broach 

cotton, a commodity which, it was admitted, never found its way either 

() (1901) 29 Cal. 461, 467, L. R. 28 (t) (1899) 24 Bom. 227. 

Ind. Ap. 239. 



THE INDIAN CONTRACT ACT. 



S. 30. by production or delivery to Dholera. The contracts were made on terms 
contained in a printed form which incorporated the rules framed by the 
cotton merchants of Dholera. Those rules expressly provided for the 
delivery of cotton in every case, and forbade all gambling in differences. 
The course of dealings was, however, such that none of the contracts was 
ever completed except by payment of differences between the contract 
price and the market price in Bombay on the vaida (settlement) day. It 
was held upon these facts that the contracts were by way of wager within 
the meaning of this section. Jenkins, C.J., said: "Here in each case 
the contract was made at Dholera, between men of Dholera, and under 
the rules of Dholera, and from the evidence we know that the witnesses 
who have been called have not been able to indicate with certainty or 
even to suggest, with one doubtful exception, a single instance since the 
formulation of those rules in 1892 in which any one of the numerous 
contracts similar to that with which we are now dealing has been 
completed otherwise than by payment of differences. Is it an unnatural 
or strained inference to draw from these facts that behind these apparently 
innocent documents there is a tacit and recognised understanding according 
to which parties who enter into these contracts do so without any intention 
of performing them otherwise than they have consistently and without 
exception been performed, that is to say, by payment of differences ? In 
my opinion that is the reasonable and natural inference to be drawn ; it 
agrees with the experience of the past ; and it represents the actual 
results in the particular instances we are now considering." On the other 
hand, the modus operand* may be such as to raise a presumption against 
the existence of a common intention to wager. This frequently happens 
when agreements of a speculative character are entered into through the 
medium of brokers, and when, according to the practice of the market, 
the principals are not brought into contact with each other, nor do they 
know the name of the person with whom they are contracting, until after 
the bought and sold notes are executed. Under circumstances such as 
these, when a party launches his contract orders he does not know with 
whom the contracts would be made (y). And this presumption is con- 
siderably strengthened when the broker is authorised by the principal to 
contract with third persons in his (the broker's) own name ; for the third 
person may in such case remain undisclosed even after the contract is 
made (z). But the presumption may be rebutted by evidence of a common 
intention to wager, though the contract has been brought about by a 



GO J. H. Tod v. Lakhmidas (1892) 16 899 ; Sassoon v. Toltersey (1904) 28 Bom. 
Bom. 441, 446. 616. 

(X) Peronh-a v. Manekji (1898) 22 Bom. 



WAGERING CONTRACTS. 185 

broker. Thus in Eshoor Doss v. Venlcatasulba Rau (a) the same broker S. 30. 
had acted for both the plaintiff and the defendant, and it was found that, 
though the parties were not brought into contact at the time defendant 
contracted to sell Government paper to plaintiff, each had made inquiry 
beforehand of the broker, not whether the other would be able to deliver 
Government paper, but whether he would be able to pay differences, and 
this circumstance along with other circumstances was deemed sufficient 
to establish that the intention on either side was to pay differences 
only. The presumption against a wager was applied in a case where the 
transactions were in Government paper to the extent of about half a 
crore of rupees, and the plaintiff was both stockbroker and stockjobber, 
and the defendant was a stockjobber. The magnitude of the transactions 
in the case was set up by the defendant to support the contention that 
the transactions were by way of wager, and reliance was placed on the 
Privy Council decision in Kong Yee Lane's case, cited above. But the 
contention was overruled and the Court said : "In the Privy Council 
case, the defendant was a rice miller or a producer by trade, and the 
wager related to quantities of rice enormously out of proportion to his 
output and capital, deliverable at option from a number of specified mills. 
Here there is, I think, sufficient proof that the defendant was known in 
the market as the largest of jobbers (b), and the capital available for the 
purchases which he bargained for was at least presumably to be supplied 
by the constituents for whom a jobber is ordinarily supposed to be 
acting "(c). 

An exception has recently been taken to the words " under no 
circumstances" which occur in the following passage in the judgment of 
Farran, J., in the case of J. H. Tod v. Lakhmidas (d), referred to above : 
" Contracts are not wagering contracts unless it be the intention of 
both contracting parties at the time of entering into the contracts under 
no circumstances to call for or give delivery from or to each other." 

On this Bachelor, J., observed in Motilal v. Govindram (e) : " It 
may perhaps be doubted whether the phrase 'under no circumstances,' 
which does not appear to have been prominently brought before the Court 
of Appeal in Doshi Talakshfs case (/), is not rather an overstatement of 
the requirements of the law ; and upon this point I would refer to the 
decision in In re Gieve " (,</). And Davar, J., said in HurmuTchrai v. 

O) (1895) 18 Mad. 306. L. R. 768. 

(&) The evidence showed that seven lacs (d) (1892) 16 Bom. 441, 445. 
would be a small day's turnover for a big (e) (1906) 30 Bom. 83, at p. 90. 
jobber in an active market. (/) (1899) 24 Bom. 227. 

(0 Dady v. Madhuram (1903) 5 Bom. (ff) [1899] 1 Q. B. 794, C. A. 



THE INDIAN CONTRACT ACT. 



S. 30. Narotamdass (h) : " 1 have no hesitation in saying that the expression 
'under no circumstances' is much too wide, and if the words of Mr. 
Justice Farran were to be taken too literally, their effect would be to 
render the provisions of s. 30 of the Contract Act more or less nugatory." 
In In re Gieve, referred to above, the contract in terms gave the buyer an 
option to demand delivery upon the payment of a small excess commission. 
It was argued that, even if the contracts were for the payment of differences 
only, the power in either party to turn them into real contracts by insisting 
upon delivery prevented them from being wagering contracts, but the 
Court of Appeal disallowed the contention. Lindley, M.R., said "It is 
a gaming transaction plus something else." The above case must be 
distinguished from the one in which there is a forward contract for the 
sale of goods with the condition that "if, before the maturity of [the] 
contract, either party thereto shall suspend payment or become bankrupt 
or insolvent, the other party or parties to such contract shall be bound to 
forthwith close the contract, and when the contract is thus closed, the 
measure of damages shall be the difference between the market price 
current at the time of closing for similar goods for delivery at the time 
named in the contract so closed and the rate named in the contract, 
[and] the damages ascertained as aforesaid shall become at once payable 
to or by the party closing the contract " ('). A contract subject to such 
condition as aforesaid is not a wagering contract. The condition merely 
amounts to a proviso that under certain unusual circumstances the date 
for the performance of the contract may be anticipated and the measure 
of damages may be ascertained in a particular way. It was so held by 
the High Court of Bombay in Champsey v. Gill and Co. (&). Distinguishing 
this case from In re Gieve, we may say that the primary intention in the 
latter case was only to pay the difference, while in Champseifs case it was 
to give and take delivery. 

Agreements collateral to wagering contracts. Thus far our 
observations are confined to suits between the principal parties to a con- 
tract. Different considerations apply where the suit is brought by a broker 
or an agent against his principal to recover his brokerage or commission in 
respect of contracts entered into by him as such, or for indemnity for 
losses (I) incurred by him in such transactions, on behalf of his principal. 

(I) See s. 222 below, which provides 
that the principal is bound to indemnify 
the agent against the consequences of all 
lawful acts. Since a wagering contract 
is void, and not unlawful, the principal, 
when sued, cannot be discharged from 
liability on the ground that the loss on 



(A) (1907) 9 Bom. L. R. 125, at pp. 136 
137. 

CO This is rule 12 of the Rules and 
Regulations of the Bombay Cotton Trade 
Association, subject to which the contract 
was made. 

(/) (1905) 7 Bom. L. R. 154. 



WAGERING CONTRACTS. 187 

Under the terms of this section it is clear that a broker or an agent may S. 30. 

successfully maintain a suit against his principal to recover his brokerage, 

commission, or the losses sustained by him, even though the contracts in 

respect of which the claim is made are contracts by way of wager (?). It 

does not follow because a wagering contract is void that contracts collateral 

to it cannot be enforced. " The fact that a person has constituted another 

person his agent to enter into and conduct wagering transactions in the 

name of the latter, but on behalf of the former (the principal), amounts to 

a request by the principal to the agent to pay the amount of the losses, if 

any, on those wagering transactions " (w). Conversely, an agent who has 

received money on account of a wagering contract is bound to restore the 

same to his principal (0). The law is, however, different in the Presidency 

of Bombay. In that Presidency, contracts collateral to or in respect of 

wagering transactions are prevented from supporting a suit by the special 

provisions of Bombay Act III of 1865 (p). " That Act was passed to 

supply the defect which Joravermal Sivlal v. Dadabhai Beramji(n) and 

other similar cases disclosed in Act XXI of 1848 (which excluded suits 

on wagering transactions), and to close the doors of the Courts of justice 

in this Presidency to suits upon contracts collateral to wagering transactions 

where such collateral contracts have been entered into or have arisen since 

the Act came into force, a purpose which it has effectually answered " (q). 

Ss. 1 and 2 of the Act run as follows : 

S. 1 : " All contracts, whether by speaking, writing, or otherwise knowingly 
made, to further or assist the entering into, effecting, or carrying out agreements by 

betting paid by his agent was the conse- Sir M. Sausse, C.J., in the Supreme Court 

quence of an unlawful act : Telu Mai v. of Bombay on its Plea side on 14th April, 

Subha Singh (1880) Punj. Rec. no. 90 ; 1859. 

Ragmth Sahal v. Mam Raj (1895) Punj. () Bhola Nath v. Mul Chand (1903) 

Rec. no. 80. 25 All. 639 ; Debi Sahai v. Oaneshi Lai 

(/) Shlbho Mai v. LachmanDas (1901) (1901) Punj. Rec. no. 4G. 

23 All. 165; Chekkav. Gajjlla (1904) 14 (^) This Act is still in force, though 

Mad. L. J. 326 ; Ragnath Sahal v. Mam Act XXI of 1848, of which it formed part' 

Raj (1895) Punj. Rec. no. 80 ; Telu Mai v. has been repealed, and must be read with 

Subha Singh (1880) Punj. Rec. no. 90. the present section so far as the Bombay 

(n) Paralth Gocardhanbhai Haribhal Presidency is concerned : Dayabhai 

v. Ranxordas Dulabhdhat (1875) 12 'J'ribJtorandas v. Lalilimichand Pana~ 

B. H. 0. 51, 57. This case, though chand (1885) 9 Bom. 358, 362 ; Perosha 

decided in 1875, was not decided under v. Maneltji (1898) 22 Bom. 899, 902; 

Bombay Act III of 1865, as the agree- Doshi Talakshi v. Shah Ujamsi Velsi 

ment sued upon was entered into before (1899) 24 Bom. 227, 232. 

that Act came into operation. See also (</) Per Westropp, C.J., in Parakh 

Tribhurandas v. Motllal (1863) 1 B. H. C- Govardhanbhai Hambhai v. Ranxordas 

34. Both these cases followed Jorarermal Dulabhdhas (1875) 12 B. H. C. 51, 58. 
Sivlal v. Dadabhai Seraniji, decided by 



188 THE INDIAN CONTRACT ACT. 

S. 30. . way of gaming or wagering, and all contracts by way of security or guarantee for the 
performance of such agreements or contracts, shall be null and void ; and no suit shall 
be allowed in any Court of justice for recovering any sum of money paid or payable 
in respect of any such contract or contracts or any such agreement or agreements as 
aforesaid." 

S. 2 : " No suit shall be allowed in any Court of justice for recovering any com- 
mission, brokerage fee, or reward in respect of the knowingly effecting or carrying out 
or of the knowingly aiding in effecting or in carrying out or otherwise claimed or 
claimable in respect of any such agreements by way of gaming or wagering or any 
such contract as aforesaid, whether the plaintiff in such suit be or be not a party to 
such last-mentioned agreement or contract, or for recovering any sum of money 
knowingly paid or payable on account of any persons by way of commission, brokerage 
fee, or reward in respect of any such agreement by way of gaming or wagering or 
contract as aforesaid." 

But the transaction in respect of which the brokerage, commission, or 
losses are claimed must amount to a wagering agreement, and it is no 
answer to a suit by a broker in respect of such a claim against his 
principal that, so far as the defendant was concerned, he entered into the 
contracts as wagering transactions with the intention of paying the 
differences only, and that the plaintiff must have known of the inability 
of the defendant to complete the contracts by payment and delivery, having 
regard to his position and means. It must, further, be shown that the 
contracts which the plaintiff entered into with third persons on behalf of 
the defendant were wagering contracts as between the plaintiff and those 
third persons (r). It has also been held that a deposit paid on a wagering 
contract cannot be recovered in a case subject to the provisions of s. 1 
of the Bombay Act (s). Nor can such a deposit be recovered under s. 65 
of the Contract Act; "for if the agreement was one merely to pay 
differences, its nature must necessarily have been known to the plaintiff 
and defendant at the time when they entered into it, and they must be 
presumed to have known also that it was void " (). 

The result therefore is that, though an agreement by way of wager is 

void, a contract collateral to it or in respect of a wagering agreement is 

not void except in the Bombay Presidency. In England also before the 

enactment of the Gaming Act of 1892 (55 Viet. c. 9) agreements collateral 

to wagering contracts were not void. Thus in Read v. Anderson (u) a 

I betting agent at the request of the defendant made bets in his own name 

j and on behalf of the defendant. After the bets were made and lost the 

I defendant revoked the authority to pay conferred upon the betting agent. 

(/) Perosha v. Manekji (1898) 22 Bom. midland Panachand (1885) 9 Bom. 858. 

899, 907 ; Sassoon v. ToTtersey (1904) 28 (t) lb. at p. 362. 

Bom. 616. () (1887) 13 Q. B. D. 779. 

(*) DayaWiai Tribhoranda* v. Lakh- 



DISTINCTION BETWEEN SPECULATION AND WAGERS. 



189 



Notwithstanding the revocation the agent paid the bets, and sued the / 
defendant to recover the amounts thereof. It was held that, the defendant 
having empowered the agent to bet in his name, the authority was 
irrevocable, and that the agent was entitled to judgment. The statute of 
1892, passed in consequence of this decision, is almost to the same effect 
as the Bombay Act. It is interesting to note that the statute was not 
passed until twenty-seven years after the Bombay Act. It may be hoped 
that in any future revision of the Contract Act the provisions of the 
Bombay Act will be incorporated in the present section, so as to render 
the law uniform on this subject in the whole of British India. 

Speculative transactions. Speculative transactions must be distin- 
guished from agreements by way of wager. This distinction comes into 
prominence in a class of cases where the contracts are entered into through 
the medium of brokers. The modus operandi of the defendant in this 
class of cases is, when he enters into a contract of purchase, to sell again 
the same quantity deliverable at the same time in one or more contracts, 
either to the original vendor or to some one else, so as either to secure 
the profit, or to ascertain the loss, before the vaida day ; and, when he 
enters into a contract of sale, to purchase the same quantity before the 
vaida day. This mode of dealing, when the sale and purchase are to and 
from the same person, has the effect, of course, of cancelling the contracts, 
leaving only differences to be paid. When they are to different persons, 
it puts the defendant in a position vicariously to perform his contracts. 
This is, no doubt, a highly speculative mode of transacting business ; but 
the contracts are not wagering contracts, unless it be the intention of 
loth contracting parties, at the time of entering into the contracts, neither 
to call for nor give delivery from or to each other. " There is no law 
against speculation, as there is against gambling "(;/). It is in cases of 
the above description that " there is a danger of confounding speculation, 
or that which is properly described as gambling, with agreements by way 
of wager; but the distinction in the legal result is vital "(y). It was 
this modus operandi that was adopted by the defendant in Tod v. 
LakhmuJas (z), where the dealings were in Broach cotton, in Perosha v. 
ManeTcji (a\ where the dealings were in Government paper and shares of 
a spinning and weaving company, and in Sassoon v. ToTcersey (&), where 
the dealings were in American futures. In all these cases the contracts 
were entered into through a broker. In the first of these cases the 



S. 30. 



(./) J. II. Tod v. Lakhmidas (1892) 16 
Bom. 441, at pp. 445, 446. 

(//) Sassoon v. Toltersey (1904) 28 Bom. 
G16, 021. 



(c) (1892) 16 Bom. 441. 
(a) (1898) 22 Bom. 899. 
(*) (1904) 28 Bom. 610. 



THE INDIAN CONTRACT ACT. 

S. 30. contracts were made by bought and sold notes, so that the principals 
would not be brought into contact with each other until after the bought 
and sold notes were executed. This would at once raise a presumption 
against the existence of a common intention to wager. In the second and 
third cases the contracts were made by the broker with third persons in 
his own name on behalf of the defendant according to the practice of the 
trade. Here the presumption against the existence of a common intention 
to wager is still stronger, for the defendant may not know at all with 
whom the broker had contracted on his behalf. The broker may be a 
sutta broker or a mere agent for gambling, but this fact is immaterial, 
for he is not a contracting party, and it is the intention of the contracting 
parties alone that is material in these cases (c). In each of the above 
cases it was contended for the defendant that the contracts sued upon 
were wagering contracts, but in each it was held that, though the trans- 
actions were of a highly speculative character, and though, so far as 
the defendant personally was concerned, he entered into the contracts 
as gambling transactions, there was no evidence to show that the other 
contracting party had also the intention to gamble. " The Indian Contract 
Act in section 30 provides that agreements by way of wager are void ; but 
that a transaction may fall within this provision of the law there must be 
at least two parties, the agreement between them must be by way of 
wager, and both sides must be parties to that wager " (d). In the last two 
cases the suit was by the broker as plaintiff to recover from the defendant 
the loss paid by the plaintiff on behalf of the defendant. 

Oral evidence of agreement being by way of wager. Though an 
agreement in writing may ostensibly be for the purchase and sale of goods 
deliverable on a certain day, oral evidence is admissible to prove that the 
intention of the parties was only to pay the difference. Such "intention" 
is a "fact" within the meaning of s. 3 of the Evidence Act (see cl. 1, 
illustration (d)), and it may be proved by oral evidence under s. 92, proviso 1, 
of the same Act, as, if proved, it would invalidate the agreement under the 
provisions of the section now under consideration (e). The same principle 

(c) Perosha v. Manekji (1898) 22 Bom. the broker were proved to be a sutta 

899, 907 ; Sassoon v. ToTtersey (1904) 28 broker. 

Bom. 616, 624. The observation in the (d} Bassoon v. Toltersey (1904) 28 Bom. 

judgment in Tod v. Lahhmidas on p. 446 616, at p. 621. 

of the report, that the broker there "was () Anupchand Hemchand v. Chanijixi 

not shown to be a sutta broker though no Ugerchand (1888) 12 Bom. 585, dissenting 

doubt a good many of the contracts from Juggernauth Sew Bux v. Ram Dyal 

he negotiated were settled by differ- (1883) 9 Cal. 791. See also Maganbhalv. 

ences," does not imply that the decision Manchhabhai (1866) 3 B. H. C. 0. C. 79. 
would in any way have been affected if 



WAGERING CONTRACTS ; INTENTION OF PARTIES. 



191 



has been reiterated in recent cases, following the English case of Universal 
Stock Exchange, Ltd. v. Strachan(f}. Thus in a Bombay case (^7) 
Tyabji, J., said : "In order to ascertain the real intention of the parties 
the Court must look at all the surrounding circumstances, and would even 
go behind a written provision of the contract to judge for itself whether 
such provision was inserted merely for the purpose of concealing the real 
nature of the transaction." And in another Bombay case (A) Jenkins, C. J., 
said : " The law says that we must find, as best we can, the true intention 
of the parties ; we must not take them at their written word, but we must 
probe among the surrounding circumstances to find out what they really 
meant. . . . We are not, and we must not be, bound by the mere 
formal rectitude of the documents if in fact there lurks behind them the 
common intention to wager, and parties cannot be allowed to obtain from 
the Courts any sanction for their wagers merely because they use a form 
which is not a true expression of their common purpose and intention. 
The [surrounding circumstances] and the position of the parties and the 
history of dealings of .this class are legitimate, though not exclusive, 
matters for our investigation into the true intention of the parties." In 
a still later case (f) Davar, J., said : " What the Court has to do is not 
simply to look at the transactions as they appear on the face of them, but 
to go behind and beyond them, and ascertain the true nature of the 
dealings between the parties by probing into surrounding circumstances 
and minutely examining the position of the parties and the general 
character of the business carried on by them." " In this class of suits it 
would be almost idle to expect to get at the truth unless the Court takes 
the widest possible outlook consistent with the provisions of the Indian 
Contract Act ; otherwise the result would be that the statute could be 
violated with impunity by the simple and habitual device of cloaking 
wagers in the guise of contracts " (&). Thus the conduct of the parties in 
the matter of the transaction in question is relevant, for if no delivery is 
asked for or offered, the presumption is that the transaction was a wager 
on the rise or fall of the market (1). In Moiilal v. Govindram (m), the 
fact that the plaintiff took the panch rate as the measure of his damages, 
and not the market rate, was held to be a plain indication that the parties 
never intended to give and take delivery. The means and ability of the 



S. 30. 



(/) [1896] A. C. 166. 

(#0 Perosha v.Manekji (1898) 22 Bom. 
899, 903. 

(/() DoshiTalaltxhi \.Shah Ujamsi Velsi 
(1899) 24 Bom. 227, 230. 

(t) JIurmukhrai v. Narotumdasx (1907) 
9 Bom" L. R. 125, at p. 137. 



(ft) Per Bachelor, J., in Motllal v 
Govindram (1906) 30 Bom. 83, at p. 99. 

(I) Motilal v. Govindram, (1906) 30 
Bom. 83, 95 ; Eshoor Doss v. Venkatagubba 
Rau (1895) 18 Mad. 306, 309. 

(t) (1906) 30 Bom. 83, 96. 



VJ2 THE INDIAN CONTRACT ACT. 

S. 30. parties to perform the contract in question are also relevant (71). The 
general character of the plaintiff's business is also material, for if it appears 
that the normal and regular course of the plaintiffs transaction was to 
pay and receive differences only, the presumption is that the transaction 
in question was merely a bargain for differences. This presumption was 
applied in a case where the plaintiff dealt in several lacs of Government 
paper, and the evidence showed that he neither delivered nor received 
Government paper except on one single occasion just before he brought 
the suit (0). It was also applied in a case where the plaintiff's transactions 
in linseed amounted to about 350,000 cwts. in two years, and the only 
linseed actually delivered during that period was 2,219 cwts., and that 
too under exceptional circumstances (p~). To determine the general 
character of the plaintiffs business, the Court ought to inquire how other 
contracts that may have been entered into by the plaintiff with the same 
defendant, or even with third parties, and relating to the goods in question, 
were previously performed by the plaintiff, whether by payment of differences 
or by delivery of goods. Thus where it appeared that at the vaida for 
which the contracts in question had been made the plaintiff had neither 
given nor taken any delivery of any cotton, it was held that the evidence 
tendered by the plaintiff to show that at other vaidas he had given and 
taken delivery of cotton was admissible, and that the lower Court was 
wrong in excluding this evidence (q). Upon the same principle, evidence 
is admissible to show that in the case of a particular class of contracts, or 
of contracts relating to a particular commodity, the normal course of 
dealing is to pay differences only. Thus in Motilal v. Govindram(r\ 
where the question was whether certain forward contracts between two 
Marwari firms for the sale and delivery of linseed were gambling trans- 
actions, evidence was admitted which showed that contracts of similar 
form were commonly made in the Marwari bazar in Bombay in Samvat 
1957 with no intention of giving or taking delivery of linseed, but with 
the sole object of gambling on differences. This evidence was objected 
to on the ground that it was res inter olios acta, but the objection was 
overruled, Bachelor, J., observing, " In admitting this evidence as to the 
real character of precisely similar agreements made under the same con- 
ditions of time and place and circumstances I do not think that I am 



() Kong Tee Lone $ Co. v. Lowjee (1895) 18 Mad. 306, 308, 309. 

Nanjee (1901) 29 Cal. 461, 467 (foot), 469; {p) Motilal v. Govindram (1906) 30 

Kesarichand v. Mei-wanjee (1899) 1 Bom. Bom. 83, 93. 

L. R. 263, 264 ; Perosha v. Manekji (1898) (q) Ckandulal v. Sidhruthrai (1905) 25 

22 Bom. 899, 907. Bom. 291. 

(o) Eshoor Doss y, Venjiftfaxubbti Ran (/) (1906) 30 Bom. 83, 92. 



WAGERING POLICIES. 193 

straining the provisions of the Evidence Act, e.g., s. 7 (s), and I may call S. 30. 
in aid a passage from the judgment of Jenkins, C.J., in Doshi Talakshi's 
case (t) ; there the learned Chief Justice, in speaking of the ' suiTounding 
circumstances ' of the agreements in that case, says that these circumstances 
' and the position of the parties and the history of dealings of this class are 
legitimate, though not exclusive, matters for our investigation into the true 
intention of the parties.' " In Doshi Talakshis case, it will be remembered, 
the question was whether certain contracts entered into in Dholera for 
the sale of Broach cotton and the delivery thereof in Bombay were 
wagering contracts, and evidence was admitted to show that, with one 
doubtful exception, no contracts similar to those in the suit were completed 
otherwise than by payment of differences. In Sassoon v. ToTcersey (u) 
evidence was admitted which showed that under contracts for the sale and 
purchase of American cotton incorporating the rules of the Liverpool 
Cotton Association delivery does take place to a considerable extent. 

Wagering Policies. The cases of life insurance and marine insurance 
afford illustrations of another variety of wagering contracts. In England 
a policy of insurance on the life of a person in which the insurer has no 
interest is void by 14 Greo. III. c. 48. That Act forbids insurance "on 
the life or lives of any person or persons or on any other event or events 
whatsoever wherein the person or persons for whose use, benefit, or whose 
account such policy or policies shall be made shall have no interest or by 
way of -wagering or gaming." This statute does not appear to apply to 
British India (2). 

In Alamai v. Positive Government Security Life Insurance Co. (y) the 
High Court of Bombay held that in India an insurance for a term of years 
on the life of a person in whom the insurer had no interest was void under 
this section. In that case the defendant company issued a policy for a 
term of ten years for Rs. 25,000 on the life of Mehbub Bi, the wife of a 
clerk in the employ of the plaintiff's husband. About a week after 
Mehbub Bi assigned the policy to the plaintiff. Mehbub Bi died a month 
later, and the plaintiff as assignee of the policy sued to recover Rs. 25,000 
from the defendants. It was held on the eyidence that the policy was 
not effected by Mehbub Bi for her own use and benefit, but had been 
effected by the plaintiff's husband for his own use and benefit, and that 
it was void as a wagering transaction, he having no interest in the life of 
Mehbub Bi. 

0) "Facts which . . . constitute the (#) It is not in the Collection of Statutes 

state of things under which they (facts in relating to India, published by the Govern- 

issue) happened, arc relevant." meiit of India in 1899, in two volumes. 

(0 (1899) 24 .Bom. 227, at p. 231. (y) (1898) 23 Bom. 191. 

() (1904) 28 Bom. 616, 624. 

i.c. 13 



194 



THE INDIAN CONTRACT ACT. 



S. 30. 



In a recent Madras case (s) the plaintiff lent a sum of money to the 
defendants on the risk of a ship belonging to them. On 3rd August, 1896, 
the defendants passed a writing to the plaintiff which, after reciting the 
loan on the risk of the ship " now under sail to Nicobars " from Negapatam, 
provided for the payment by the defendants to the plaintiff on 20th March, 
1807, of the loan, with interest thereon at the rate of 18 per cent, per 
annum, if the ship returned safe to Negapatam after completion of her 
voyage, but that if she did not return the plaintiff lost his money. The 
ship had left Negapatam on 23rd July, 1896, and was lost at sea three 
days later. In a suit by the plaintiff to recover the amount of the loan on 
the ground that the ship was lost before the date of the agreement, it was 
held that the agreement was by way of wager and void under this section. 
Davies, J., said that agreements similar to this were in vogue in England 
up to the time of the passing of 19 Geo. II. c. 37 under the names 
sometimes of famus nauticwn and sometimes usura maritima, but as they 
were considered to give an opening for usurious and gaming contracts, 
they were forbidden by that statute. 

Void. Agreements by way of wager being void, no suit will lie on a 
promissory note for a debt due on a wagering contract. Such a note must 
be regarded " as made without consideration"; for "a contract which is 
itself null and void cannot be treated as any consideration for a promissory 
note " (#). Such agreements, however, are not illegal (V). A suit will 
therefore lie to recover a sum of money paid by the plaintiff for the 
defendant aud at his request, though such sum represents the defendant's 
loss on a bet (c). Similarly money lent for gaming purposes (d), or to 
enable the defendant to pay off a gambling debt (e), is recoverable. Such 
a transaction is neither against the provisions of the present section nor 
of s. 23 (/). I 

S. 294A of the Penal Code makes it penal to keep any office or place 
for the purpose of drawing any lottery not authorised by Government or 
to publish any proposal to pay any sum, or to deliver any goods, or to do 
or forbear doing anything for the benefit of any person on any event or 



(z) Vappakandu Marakayar v. Anna- 
inalai Chetti (1901) 25 Mad. 661. 

(a) Trikam Damodhar v. Lala Amir- 
cluind (1871) 8 B. H. C. A. C. 181. See 
also Doshi Talaltxhi v. Shah Ujamsi Velsl 
(1899) 24 Bom. 227 ; Pcroxlia v. MtitieJ.-ji 
(1898) 22 Bom. 899. 

(It) Jiiyycritauth St'ir liit.r v. litini Di/til 
(1883) 9 Cal. 791. 796. It was also held 
that the expression " void " hi Act XXI 



of 1848 did not mean unlawful : Parakh 
Govardhanbhai v. Ransordas (1875) 12 
B. H. C. 51, 56. 

(c) Prlngle v. Jafar Khan (1883) 5 
All. 443. 

00 Subbaraya v. Derandra (1884) 7 
Mad. 301. 

(<?) Ht-iii Mddlto Dus v. Kaunsal Kishor 
Dhusar (1900) 22 All. 452. 

(/) 1*. 



LOTTERY. 195 

contingency relative or applicable to the drawing of any ticket, lot, Ss. 30, 31. 
number, or figure in any such lottery. 

Before the enactment of this section of the Code lotteries not 
authorised by Government were prohibited in India by Act V of 1844. 
The Act declared all such lotteries "common and public nuisances and 
against law." The Act was repealed by the Penal Code Amendment 
Act XXVII of 1870, and in its place s. 294A was inserted in the Code 
(see s. 10 of the amending Act). 

What is a Lottery ? " Lotteries ordinarily understood are games of 
chance in which the event of either gain or loss of the absolute right to a 
prize or prizes by the person concerned is made wholly dependent upon the 
drawing or casting of lots, and the necessary effect of which is to beget a 
spirit of speculation and gaining that is often productive of serious evils." 
It was so stated in a Madras case (g) where an agreement was entered into 
between twenty persons whereby it was provided that each should subscribe 
Us. 200 by monthly instalments of Es. 10, and that each in his turn, as 
determined by lot, should take the whole of the subscriptions for one 
month. The defendant contributed Es. 10 every month for a period of 
ten months, and in the tenth month he got his lot of Es. 200. Thereupon 
a bond was taken from him by the plaintiff, who was the agent in the 
business, for the remaining Es. 100 in order to ensure the future regular 
payment of monthly instalments for the further period of ten months. In 
a suit upon the bond it was contended that the transaction was illegal as 
being a lottery within the meaning of Act V of 1844, and that the suit 
therefore could not be maintained. It was held that the transaction did 
not amount to a lottery. The Court said : " Here no such lottery appears 
to have taken place. It is not the case of a few out of a number of 
subscribers obtaining prizes by lot. By the arrangement all got a return 
of the amount of their contribution. It is simply a loan of the common 
fund to each subscriber in turn, and neither the right of the subscribers to 
the return of their contributions nor to a loan of the fund is made a matter 
of risk or speculation. No loss appears to be necessarily hazarded, nor 
any gain made a matter of chance." 

CHAPTER III. 

OF CONTINGENT CONTRACTS. 

31. A " contingent contract " is a contract to do or not 
"Contingent con- to ^ something, if some event, collateral to 



tract " denned. ^^ con t ra ct, dOGS 01' d06S not happen. 

(g) Kamakshi Achari v. Appuvu Filial (1863) 1 M. H. C. 448. 

132 



196 THE INDIAN CONTRACT ACT. 

. S. 31. Illustration. 

A. contracts to pay B. Ea 10,000 if B.'s house is burnt. This is 
a contingent contract. 

Of the section in general. This short chapter of the Act appears 
to be the original work of the legislative department. There are some 
clauses on the subject in the draft prepared in England, but their language 
is quite different. We do not know why the word "contingent," familiar 
to English lawyers only in the law of real property, was preferred to 
" conditional." The general principle is thus stated by the late Mr. Leake, 
the most comprehensive and accurate of English text-writers : " Promises 
may be absolute or conditional. An absolute promise is due immediately, 
and independently of any event or contingency ; as a debt due and payable 
at the present time. ... A conditional promise is one of which the 
performance becomes due only after a lapse of time, or upon the happening 
of some event, certain or uncertain." (h). 

In the text of the Act the words " some event collateral to such con- 
tract " are not very clear. They seem on the whole to mean that the 
event is neither a performance directly promised as part of the contract, 
nor the whole of the consideration for a promise. Thus, if I offer a 
reward for the recovery of lost goods, there is not a contingent contract ; 
there is no contract at all unless and until some one, acting on the offer, 
finds the goods and brings them to me. So, if I tell B. I will pay him 
Rs. 1,000 if he marries C., this is not a contingent contract, but merely an 
offer which will become a contract if, without any revocation of it in the 
meantime, B. does marry C. ; and therefore illustration (c) to s. 32 and 
the illustration to s. 34, below, must be read as implying that the agree- 
ment is made for some present and independent consideration. Again, 
a contract to pay a man for a piece of work is very commonly made on the 
terms that he is to have no pay till the work is all done ; but the comple- 
tion of the work, being the very thing contracted for, is not collateral to 
the contract, and the contract is not properly said to be contingent, though 
the performance of the work may be and often is said to be a condition 
precedent to the payment of the wages. 

The illustration to the section is the ordinary one of a contract of fire 
insurance. All contracts of insurance and indemnity are obviously con- 
tingent. So are many other usual kinds of contracts in both great and 
small matters. A wager is a contingent agreement, but s. 30 prevents it 
from being a contract. A contract between A. and Z. that if A. succeeds 
in his suit with regard to certain land in the possession of Z. he shall 

(A) Leake ou Contracts, Part III. chap. ii. p. 445, 5th ed. 



CONTINGENT CONTRACTS. 197 

purchase the land from Z. for Rs. 300 is contingent (). This, however, is S. 31. 
not a common type of contract. A contracj; to supply a man, in return for a 
fixed payment, with extracts of newspaper articles or paragraphs relating to 
a given subject which may appear during a given time is contingent ; for 
the duty arises only if and when such matter is published in one of the 
journals contemplated by the parties. Here the contingent events do not 
in any necessary or probable way depend on the promisor's will ; but in 
many cases as, for example, a sale on approval the contingency may 
depend on an act of discretion to be exercised by him. 

Contingency dependent on act of party. The distinction just now 
mentioned requires some further explanation. Words of promise amount 
to no promise at all if their operation is expressed to be dependent, in terms 
or effect, on the mere will and pleasure of the promisor, as if a man says 
that for a certain service he will pay whatever he himself thinks right or 
reasonable (&). But the operation of a promise may well be dependent on 
a voluntary act other than the mere declaration of the promisor's will to be 
bound. The act may be that of a third person ; thus a promise to pay 
what A. shall determine is perfectly good. The act may also be that of 
the promisor himself, so long as it is not an act of mere arbitrary choice 
whether he will be bound or not, as in the common case of goods being 
sold on approval, where the sale is not completed until the buyer has either 
approved the goods or kept them beyond the time allowed for trial (/). 
So, in the case of goods to be manufactured to order, it may be a term of 
the contract that the work shall be done to the customer's approval, and 
then the customer's judgment, acting " bonafide and not capriciously," is 
decisive (w). A builder's right to recover for his work is often made con- 
ditional on the architect certifying that the work lias in fact been done and 
properly done, and such a condition is good (ri). Payment of a policy of 
insurance may be conditional on proof of the claim satisfactory to the 
directors of the insurance company being furnished; this meaud such 
proof as they may reasonably require (o). 

The English authorities were considered, and the principle applied, by 
the High Court of Madras in Secretary of State for India v. Arathoon (p). 
The plaintiff had entered into a contract to supply Government with a 

(/) Ismalv. Daudbhal (1900) 2 Bom. () Morgan v. Blrnle (1833) 9 Bing 

L. R. 118. 672, 35 R. R. 65; Clurlte \. Watson 

(/O Huberts r. Smith (1859) 4 H. & N. (18(55) 18 C. B. N. S. 278. 

315. (o) Braunsteln v. Accidental Death 

(/) Elphlclt v. Barnes (1880) 5 C. P. D. Insurance Co. (1861) 1 B. & S. 782. 

321. (^) (1879) 5 Mad. 173. Here, as too 

(m) Andrews v. Beljield (1857) 2 C. B. frequently in India, failure to report the 

N. S. 779. argument has made the j udgments obscure. 



1 8 THE INDIAN CONTRACT ACT. 

S. 31. certain quantity of timber. One of the terms of the contract was that the 
timber should be of unexceptionable quality and should be liable to be 
rejected if not approved by the Superintendent of the Gun Carriage 
Factory, for which it was required. The timber tendered was not approved 
by the Superintendent, and was accordingly rejected. The plaintiff sued 
for breach of the contract, contending that the timber which he tendered 
answered the description in the contract. It was not alleged that the 
Superintendent failed to exercise a judgment in regard to the suitability of 
the wood. The lower Court held that, the Superintendent being substan- 
tially a party, his judgment could not be regarded as conclusive, and that 
it was open to the plaintiff to show that his tender ought to have been 
accepted, but the Madras High Court reversed this decision, holding that 
it was not open to the plaintiff to question the reasonableness of the 
Superintendent's disapproval. Innes, Offg. C. J., said : " The rule of the 
Civil Law that a condition the happening of which is at the will of the 
party making it is null and void as being destructive of the contract 
(Dig. XLV. Tit. 1, 108) probably relates to [cases] where the promisor is 
not bound to exercise a discretion, as a promise by one to give ' if I am so 
minded,' for sales and other contracts on a condition the happening of 
which was entirely subject to the result of a mental process of discrimination 
on the part of one party were undoubtedly recognised as valid. (See 
Dig. XVIII. Tit. 1, De Contrahenda Emtione; see also Pothier, Part I. chap. i. 
art. iii. s. 7.) At all events, it is not a rule of the Indian law of 
contracts, and it may be doubted if it is a rule of the English law." If 
this means that the Common Law will give effect to a merely illusory 
promise, it is not correct ; but that which " is not a rule of the Indian law 
of contracts " seems to be the Civil Law not as the learned Judge himself 
thought it was, but as some one else had suggested. There does not appear 
to be any real difference here between English and Roman law. Muttusilmi 
Ayyar, J., in his following judgment, quoted a not very clear illustration, 
as from. Windscheid's Pandekten, which we have been unable to identify 
in that author's text. 

Conversely the operation of penal clauses in a contract may be made 
to depend not only on some default of one party, but on the decision of a 
person appointed by the other party that a default contemplated by the 
contract has taken place. In AyJwre Nauth Banmrjee v. The Calcutta 
Tramways Co., Ltd. (q), a conductor on taking service with the defendant 
company deposited a sum of money with them as security for the perform- 
ance of his duties subject to the condition that the deposit should be for- 
feited if there was any dereliction of duty on his part, as to which the 

(^) (1885) 11 Cal. 232, cited in the commentary on s. 28, aide. 



CONTINGENT CONTRACTS. 199 

certificate of the company's manager was to be conclusive. In a suit by Ss. 31, 32. 
the conductor to recover the amount of his deposit the Court held that he 
was bound by the certificate of the manager, and that the manager was no 
more the company than the engineer or architect who is constituted the 
arbitrator, under a contract for works, to settle disputes as to extras or 
penalties, is identical with the person or body for whom the work is done. 
The case, however, was argued and decided on s. 28. 

In some kinds of contracts, especially for the sale or letting of 
immovable property, clauses are commonly inserted expressly giving one 
or both of the parties an option to rescind the contract in specified events. 
In such cases, and in other cases where there is a complete and active 
obligation from the first, though subject to be defeated by matter 
subsequent, it does not seem that the contract can properly be called 
contingent. 

32. Contingent contracts to do or not to do anything 
Enforcement of ^ an uncertain future event happens cannot 
thl'genfoiran" event ^ e enforced by law unless and until that event 
happening. ^as happened. 

If the event becomes impossible, such contracts become 

void. 

Illustrations. 

(a) A. makes a contract with B. to buy B.'s horse if A. survives 
C. This contract cannot be enforced by law unless and until 0. dies 
in A.'s lifetime. 

(b) A. makes a contract with B. to sell a horse to B. at a specified 
price if C., to whom the horse has been offered, refuses to buy him. 
The contract cannot be enforced by law unless and until C. refuses to 
buy the horse. 

(c) A. contracts to pay B. a sum of money when B. marries C. 
C. dies without being married to B. The contract becomes void. 



There are some cases which may be dealt with either under this section 
or s. 56, for it may be equally true to say that performance of a material 
part of the contract has become impossible, and that the contract was made 
on the contingency of an event which has become impossible ; or it may 
be hard at first sight, at any rate, to say which section is the more appli- 
cable. See on s. 56, p. 252, below, and Krell v. Henry (f), where a contract 
to hire the use of a room in London to view the intended coronation proces- 
sion of June, 1902, was held, in effect, to be conditional on the procession 
taking place. 

(V) [1903] 2 K. B. 740. 



200 THE INDIAN CONTRACT ACT. 

Ss. 3335. 33. Contingent contracts to do or not to do anything 

Enforcement of ^ an uncertain f uture event does not happen 
gent^anTvent can be enforced when the happening of that 
not happening. ev ent becomes impossible, and not before. 

Illustration. 

A. agrees to pay B. a sum of money if a certain ship does not 
return. The ship is sunk. The contract can be enforced when the 
ship sinks. 

34. If the future event on which a contract is con- 
tingent is the way in which a person will act 

When event on 

which contract is at an unspecified time, the event shall be con- 
contingent to be -1-1,1 -111 i 
deemed impossible, sidered to become impossible when such person 

conduct of a living does anything which renders it impossible that 
he should so act within any definite time, or 
otherwise than under further contingencies. 

Illustration. 

A. agrees to pay B. a sum of money if B. marries C. 0. marries D. 
The marriage of B. to 0. must now be considered impossible, although 
it is possible that D. may die and that C. may afterwards marry B. 



Ss. 32 and 33 cannot be made plainer by any commentary. S. 34 is 
in accordance with very old English authority. A man who has contracted 
to sell and convey a piece of land to A. on a certain date breaks his con- 
tract by conveying it to Z. before that date, though he might possibly get 
the land back in the meantime (s). English cases on conditional gifts in 
wills ought not to be cited in this connection, the rules applicable to the 
construction of wills being in some respects peculiar. The illustration to 
the section, in which it must be assumed that A.'s agreement is made for 
some distinct consideration, as otherwise it would be merely a proposal, 
may therefore be taken as declaring the common law. 

35. Contingent contracts to do or not to do anything if 
When contracts a specified uncertain event happens within a 
fixed t ime become void if, at the expiration of 

the time fixed > SUch 6Vent haS not happened, 

fixed time. or j^ before the time fixed, such event 

becomes impossible. 

(*) Choke, J., Y. B. 21 Ed. IV. 55, pi. 26. 



CONTINGENT CONTRACTS. 201 

Contingent contracts to do or not to do anything if a Ss. 35, 36. 
specified uncertain event does not happen 

When contracts 

may be enforced within a fixed time may be enforced by law 

which are con- 
tingent on specified when the time fixed has expired and such 

event not happen- 
ing within fixed event has not happened, or, before the time 

fixed has expired, if it becomes certain that 
such event will not happen. 

Illustrations. 

(a) A. promises to pay B. a sum of money if a certain ship returns 
within a year. The contract may be enforced if the ship returns 
within the year; and becomes void if the ship is burnt within the 
year. 

(b) A. promises to pay B. a sum of money if a certain ship does 
not return within a year. The contract may be enforced if the ship 
does not return within. the year, or is burnt within the year. 

36. Contingent agreements to do or not to do anything, 
if an impossible event happens, are void, 

Agreement con- . 

tingent on impos- whether the impossibility or the event is 

sible events void. . , 

known or not to the parties to the agreement 
at the time when it is made. 

Illustrations. 

(a) A. agrees to pay B. 1,000 rupees if two straight lines should 
enclose a space. The agreement is void. 

(b) A. agrees to pay B. 1,000 rupees if B. will marry A.'s daughter 
0. C. was dead at the time of the agreement. The agreement is 
void. 



The two last foregoing sections explain themselves. Before leaving 
this chapter we may note that somewhat similar provisions as to transfers 
of property made subject to conditions occur in the Transfer of Property 
Act, 1882 ; see especially ss. 25 34. A conditional transfer of property, 
though it may be, and often is, made in pursuance of a contract, is not, 
of course, itself a contract. It was therefore necessary to lay down 
distinct and independent, though more or less analogous, rules for such 
transactions. 



THE INDIAN CONTRACT ACT. 
S "Vt 

CHAPTEK IV. 

OF THE PERFORMANCE OF CONTRACTS. 
Contracts which must be per/owned. 

37. The parties to a contract must either perform, or 

obligation of ff er to perform, their respective promises, 

parties to contracts. un i esg gucn performance is dispensed with or 

excused under the provisions of this Act, or of any other law. 
Promises bind the representatives of the promisors in 
case of the death of such promisors before performance, 
unless a contrary intention appears from the contract. 

Illustrations. 

(a) A. promises to deliver goods to B. on a certain day on payment 
of Es. 1,000. A. dies before that day. A.'s representatives are bound 
to deliver the goods to B., and B. is bound to pay the Es. 1,000 to A,'s 
representatives. 

(b) A. promises to paint a picture for B. by a certain day, at a 
certain price. A. dies before the day. The contract cannot be enforced 
either by A.'s representatives or by B. 

Performance and discharge. A contract, being an agreement enforce- 
able by law (s. 2, p. 11, above), creates a legal obligation, which subsists 
until discharged. Performance of the promise or promises remaining to be 
performed is the principal and most usual mode of discharge, but there are 
several others. Accordingly the usual method of approved text-writers is 
to make Discharge of Contract a main head of the subject, and treat of 
Performance and other ways of discharge, such as agreement of the parties, 
breach of the contract, and operation of law, under distinct chapters or 
subdivisions, as may be seen in the works of the late Mr. Leake and of 
Sir W. Anson. This Act, for some reason which does not appear, has 
made " The Performance of Contracts " the principal title, with the some- 
what curious result of including under it a group of sections (G2 67) on 
" Contracts which need not be performed." Whatever may be the merits 
of this innovation, elegance is not one of them. It is sufficient for 
practical purposes, however, if the law is intelligibly stated in some kind 
of coherent order. 

The sections (51 58) on the Performance of Reciprocal Promises really 
belong to the head of interpretation, which is not separately dealt with by 
the Act. 



DUTIES AND RIGHTS OF REPRESENTATIVES. 203 

This section has some resemblance to a clause of the original draft S. 37. 
(cl. 30), which, however, seems rather intended to define what performance 
is sufficient than to lay down any duty of performance in general. As to 
performance by an agent, see s. 40, below. The rule of the Common Law 
which is here affirmed in the second paragraph was stated in England in 
1869 by Willes, J., a judge of very great learning and authority : " Gene- 
rally speaking, contracts bind the executor or administrator, though not 
named. Where, however, personal considerations are of the foundation of 
the contract, as in cases of principal and agent and master and servant, 
the death of either party puts an end to the relation (fy and, in respect of 
service after the death, the contract is dissolved, unless there be a stipulation 
express or implied to the contrary " (u). 

Such personal considerations as are here mentioned extend, as shown by 
illustration (b) to the present section, to contracts involving special per- 
sonal confidence or the exercise of special skill (cp. s. 40, p. 223, below). They 
do not extend to mere exercise of ordinary discretion. The executors of a 
man who has ordered goods deliverable by instalments under a continuing 
contract may be bound to accept the remaining instalments, for the duty 
or discretion of seeing that the goods supplied are according to contract 
does not require any personal qualification (#). 

Succession to benefit of contract. Neither the present section nor 
anything else in the Act lays down any rule as to the manner in which or 
the extent to which persons other than the original promisee may become 
entitled to enforce a promise. 

Generally the representatives of a deceased promisee may enforce 
subsisting contracts with him for the benefit of his estate. It is no real 
exception to this rule that in some cases the nature of the contract is in 
itself, or may be made by the intention of the parties, such that the 
obligation is determined by the death of the promisee. The most obvious 
example is the contract to marry in the Common Law. Another more 
seeming than real exception is where performance by the other party is 
conditional on some performance by the deceased which was not completed 
in his lifetime and is of such a personal character that performance by his 
representatives cannot be equivalent. An architect's executor, for example, 
cannot insist on completing an unfinished design, even if he is a skilled 
architect himself ; and accordingly he cannot fulfil the conditions on which 

(t) The use of "relationship" as (w) Farrow v. Wilton, L. R. 4 0. P. 

equivalent to " relation " in this sense has 744, 746. 

been common for some years, but is (a?) Wentworth v. Cock :(1839) 10 A. &E. 

improper. Willes, J., would certainly not 42, 60 R. R. 316. 
Lave approved it. 



THE INDIAN CONTRACT ACT. 

S. 37. payment, or further payment, as the case may be, would have become due. 
But a builder's executors may be entitled and bound to perform his con- 
tracts for ordinary building work, for they have only to procure workmen 
of ordinary competence, and similarly in other cases. It is to be remem- 
bered that all rules of this kind are in aid of the presumed intention of the 
parties, and if the parties have expressed a special intention it must 
prevail. 

Payments actually earned and due to a man before his death, though 
for services of a confidential or personal kind, are a portion of his estate as 
much as any other debts, and accordingly his representatives succeed to 
his right of action for them, and may recover them. This is indeed, as a 
general proposition, elementary, though doubts may be raised on particular 
facts as to what were exactly the rights acquired by an original contracting 
party in his lifetime (y). The same rule applies to rights of action for 
conventional damages or penalties (2). 

But a cause of action for damages for injuries of a merely personal 
nature, though arising out of a breach of contract, cannot be sued upon by 
or against executors (a). So it is in the case of breach of promise of 
marriage in England (b), at all events unless special pecuniary damages 
can be proved ; and so it is understood to be with regard to personal 
injuries caused by negligence in the performance of a contract, though, as 
above mentioned, a sum agreed in the party's lifetime as compensation even 
for such injuries is part of his personal estate, and the right to sue for it 
passes to his representatives. 

" Although a right of action for not marrying or not curing, in breach 
of an agreement to marry or cure, would not generally pass to the assignees 
[in bankruptcy], I conceive that a right to a sum of money, whether 
ascertained or not, expressly agreed to be paid in the event of failing to 
marry or to cure, would pass " (c). 

(y) Stubbs v. Holywell R. Co. (1867) destroy rights of action which he had 

L. R. 2 Ex.311. The argument for the already acquired. 

defendant was that the contract was (z) Becliham, v. Dralte (1849) 2 H. L. C* 

really entire, and the payment by instal- 579, 81 R. R. 301. 

ments only a matter of convenience, and (a) See Indian Succession Act, 1865, 

that the full performance of the contract s. 268, and Probate and Administration 

had become impossible by the original Act, 1881, s. 89. 

party's death. But such an argument (i) Clutmlerluin v. Williamson (1814) 

could be maintained only by showing that 2 M. & S. 408, 15 R. R. 295; Fluliiy v 

in his lifetime he could not have sued for C/iirney (1888) 20 Q. B. Div. 494. 
any instalment until he had done the (>) Opinion of Maule, J., given to the 

whole of the work, which would reduce House of Lords in Seckham v. Dralte 

the contract to an absurdity. His death (1849) 2 H. L. C. at p. 622, 81 R. R. 329. 
put an end to the contract, but did not 



ASSIGNMENT OF CONTRACTS. 

The rights of an insolvent debtor's assignees to sue on his contracts 
depend, of course, on statute ; but in the absence of more specific provisions 
they are governed by the same principles as an executor's. 

Assignment of contracts. Broadly speaking, the benefit of a contract 
can be assigned, bjat_j^_ih__huideji, subject to the same exception 
of strictly personal contracts that has been mentioned as affecting the 
powers and duties of executors. The principles were lately laid down 
anew by the Court of Appeal in England : " Neither at law nor in 
equity could the burden of a contract be shifted off the shoulders of 
a contractor on to those of another without the consent of the contractee. 
A debtor cannot relieve himself of his liability to his creditor by assign- 
ing the burden of the obligation to some one else ; this can only be 
brought about by the consent of all three, and involves the release of 
the original debtor. ... On the other hand, it is equally clear that 
the benefit of a contract can be assigned, and wherever the consideration 
has been executed, and nothing more remains but to enforce the obliga- 
tion against the party who has received the consideration, the right to 
enforce it can be assigned, and can be put in suit by the assignee in his 
own name after notice. . . . There is, however, another class of contracts, 
where there are mutual obligations still to be enforced, and where it is 
impossible to say that the whole consideration has been executed. Contracts 
of this class cannot be assigned at all in the sense of discharging the 
original contractee and creating privity or quasi-privity with a substituted 
person. . . . To suits on these contracts, therefore, the original coutractee 
must be a party, whatever his rights as between him and his assignee. He 
cannot enforce the contract without showing ability on his part to perform 
the conditions performable by him under the contract. This is the reason 
why contracts involving special personal qualifications in the contractor 
are said, perhaps somewhat loosely, not to be assignable." Not that the 
burden of a contract can ever really be assigned, but sometimes it may be 
discharged by a delegated performance (in which case it does not matter to 
the promisee what are the exact relations of agency or otherwise between 
the promisor and his delegate), and sometimes not (d). 

The Contract Act has no section dealing generally with assignability 
of contracts. A contract which, under section 40, is such that the promisor 
must perform it in person has been held not to be assignable. " When 
considerations connected with the person with whom a contract is made 
form a material element of the contract, it may well be that such a contract 
on that ground alone is one which could not be assigned without the 

(<Z) Tolkurst v. Associated Cement Manufacturers [1902] 2 K. B. G60, 668, (JG'J, 
per Collins, M.K. 



205 



S. 37. 



THE INDIAN CONTRACT ACT. 



promisor's consent, so as to entitle the assignee to sue him ou it " (e). 
Thus where R. agreed with M., the proprietor of an indigo concern, to sow 
indigo, taking the seed from M.'s concern on four biggahs of land out of 
his holding selected by M. or his Amlah, and, when the indigo was fit for 
weeding and reaping, to weed and reap it according to the instructions of 
the Amlah of the concern, and if any portion of the said land was in the 
judgment of the Amlah found bad, in lieu thereof to get some other land 
in his holding selected and measured by the Amlah, it was held that the 
contract was entered into with reference to the personal position, circum- 
stances, and qualifications of M. and his Amlah, and M. could not assign 
the contract without the consent of R. (/). Similarly, where A., a salt 
manufacturer, agreed with B. to manufacture for him for a period of seven 
years such quantity of salt as B. required in consideration of B. paying 
him at a fixed rate, four months' credit after each delivery being allowed 
to B., and of his paying Government taxes and dues, and executing all but 
petty repairs in A.'s factory, it was held that the contract was based upon 
personal considerations, and that it was not therefore competent to B. to 
assign the contract without A.'s consent (g). After referring to the terms 
of the contract, the Court said : " There is therefore not only credit given 
to [B.] in the matter of payment, but other liabilities are thrown upon 
him, the discharge of which depended upon his solvency, and there is also 
a certain discretion vested in him in regard to the quantity of salt to be 
demanded (h). You have a right to the benefit you contemplate from the 
character, credit, and substance of the party with whom you con tract "('). 
But where A. agreed to sell certain gunny bags to B. which were to be 
delivered in monthly instalments for a period of six months, and the con- 
tract contained certain buyer's options as to quality and packing, it was 
held that the clause as to buyer's option did not preclude B. from assigning 
the contract (&). " There is nothing," it was said, " on the face of the 
contract to suggest that any credit was given by the defendant company to 
the original purchaser or that any circumstance of an especial or particular 
character existed which led to the making of the contract between the 
parties thereto "(/). See Specific Relief Act, s. 21 (b) and illustrations. 



(e) Toomey v. Rama Sahi (1890) 17 Cal. 
115, at p. 121. 

(/) Ibid. 

(g) Namaxitaya Gurukkal v. Kadh- 
Annual (189-1) 17 Mad. 168. 

(//) Ibid., p. 174. The decision .also 
proceeded on the ground that the contract 
was executory, and its assignment as such 
was invalid without A.'s consent (ib. 



p. 175). 

(i) Humble v. Hunter (1848) 12 Q. B. 
310, at p. 317 ; Arkansas Smelting Co. 
v. Belden Co., 127 U. S. 379, 380. 

(K) Juffer Meher All v. Budge Budye 
Jute Mills <>. (1906) 33 Cal. 702, affirmed 
on appeal 34 Cal. 289. 

(Z) Ibid., p. 707. 



ASSIGNMENT OF CONTRACTS. 207 

We next proceed to consider whether a contract for the future delivery S. 37. 
of goods can be assigned under the Indian law ; that is, if A. agrees to sell, 
say, rapeseed, cotton, or gunny bags to B., deliverable at a future day, 
whether either party can assign the contract without the consent of the 
other, while the contract is still executory, so as to enable the assignee to 
maintain an action in his own right and in his own name. In Tod v. 
Lakhmidas (m~), decided in the year 1892, it was held by the High Court of 
Bombay that neither the seller nor the buyer of goods, where the goods are 
to be delivered at a future day, can assign the contract, before the date 
fixed for delivery, to a third person without the consent of the other so as 
to entitle the assignee to sue in his own name ; but that there was no 
objection to a suit brought by the assignor and assignee as co-plaintiifs, for 
when the suit is by them both, there is no question as to which of them is 
to recover (ri). The decision expressly proceeded upon the principle of the 
English law that where a contract is still executory the burden thereof 
cannot be assigned. The Court was not called upon to decide whether the 
interest of the seller or buyer in the contracts was assignable as an action- 
able claim within the meaning of the Transfer of Property Act ; for that 
Act, though passed in the year 1882, was not extended to the Bombay 
Presidency until 1st January, 1893, and the case was heard and decided 
about eleven months before that date (0). Anactionable claim is defined 
in s. 3 of that Act as a claim to any debt (except secured debts), or to 
any beneficial interest in movable property not in the possession, either 
actual or constructive, of the claimant, whether such debt or beneficial 
interest be existent, accruing, conditional, or contingent. An actionable 
claim can always be assigned, but the assignment, to be complete and 
effectual, must be effected by an instrument in writing ; and upon the 
execution of such instrument all the rights and remedies of the assignor 
vest in the assignee, who may thereupon sue in his own name without 
making the assignor a party to the suit (p). As regards the interest of a 
buyer of goods in a contract for forward delivery, it has now been held by 
the High Court of Calcutta, in Jaffer Meher All v. Budge Budge Jute Mills 
Go. (q), and by the High Court of Bombay, in Hunsraj Morarji v. Nathoo 
Gangaram (r), that such interest is an actionable claim within the meaning 
of the Transfer of Property Act, and may be assigned as such so as to 

(/) (1892) 16 Bom. 441. Chief Court of Lower Burma. 

() Ibid. ; Jhcan v. Ilaji Oosnian (p) Transfer of Property Act, 1882, 

(1903) 5 Bom. L. R. 37)5. s. 130, as amended by Act II of 1900. 

0) The Act is not yet extended to the (//) (1906) 33 Cal. 702, affirmed on 

Punjab, nor to British Burma, except the appeal in 34 Cal. 289. 

area included within the local limits of (r) (1907) 9 Bom. L. R. 838. 
the ordinary civil jurisdiction of the 



THE INDIAN CONTRACT ACT. 

enable the assignee to sue in his own name. In the former case Sale, J., 
said : " The rule as regards the assignability of contracts in this country is 
that the benefit of a contract for the purchase of goods as distinguished 
from the liability thereunder may be assigned, understanding by the term 
benefit the beneficial right or interest of a party under the contract and the 
right to sue to recover the benefits created thereby. This rule is, however, 
subject to two qualifications : first, that the benefit sought to be assigned 
is not coupled to any liability or obligation that the assignor is bound to 
fulfil, and, next, that the contract is not one which has been induced by 
personal qualifications or considerations as regards the parties to it. 
Neither of these exceptions, 1 think, applies to the present case. There is 
nothing on the face of the contracts to suggest that any credit was given 
by the defendant company to the original purchaser, or that any circum- 
stance of an especial or personal character existed which led to the making 
of the contract between the parties thereto, nor, looking at the terms of the 
contract, does it appear to impose any liability or obligation of a personal 
character on the assignor which would prevent the operation of the rule of 
assignability. The contract is for the sale on the usual terms of a certain 
quantity of gunny bags to Cassim Karim, and subject to the exercise of 
certain options the purchaser has an absolute right to call for delivery of 
the goods on payment of the price. I am inclined to think that the right 
to claim the benefit of the contract, or, in other words, the right on certain 
conditions to call for delivery of the goods mentioned in the contract, 
constitutes a ' beneficial interest in movable property, conditional or con- 
tingent,' within the meaning of the definition of an actionable claim in 
section 3 of the Transfer of Property Act, and as such is assignable." And 
in the Bombay case, where also the assignment was by the buyer, Jenkins, 
C.J., said : " What was transferred was, in my opinion, property, and under 
section 6 of the Transfer of Property Act property of any kind may be 
transferred, except as therein provided. None of the specified exceptions 
would have included what Shariffbhoy [buyer] purported to transfer, and 
I further hold that the subject of the transfer was an actionable claim, and 
so Chapter VIII of the Transfer of Property Act (s) applies. That this 
view of the Transfer of Property Act does not involve any material change 
in the law as previously understood in Bombay is apparent from what was 
said by Westropp, C. J., in Dayabhai Dipchand v. Dulldbhram Dayaram (t)" 
In the last-mentioned case, A. agreed to sell certain shares to B., deliverable 
at a future day. A., that is, the seller, assigned the contract to C. (it does 
not appear exactly when or how), and C. sued B. for damages for refusing 

(a) That is the Chapter of Transfers of () (1871) 8 B. H. C. 133. 

Actionable Claims. 



ASSIGNMENT OF CONTRACTS. 209 

to take delivery. The District Judge, without examining the circumstances, Ss. 37, 38. 

held that such a contract was not assignable, but the case was remitted to 

him to determine upon all the facts. "Westropp, C. J., said : " The District 

Judge should . . . have held that in equity it [contract] was assignable 

for a valuable consideration (Spence, Eq. Juris 852) (u), subject, no doubt. 

(generally speaking), to the equities (if any) which may have existed 

between the defendant and the original vendor." It has yet to be decided 

whether the right of a seller to call for payment of the price of goods on 

delivery is an actionable claim and as such assignable. The dicta in Jaffer 

Meher AUv. Budge Budge Jute Mills Co. are wide enough to include the 

seller's interest. 

Any other Law. The most important statutory discharge of contracts, 
outside the present Act, is that which follows on insolvency. See as 
respects the Presidency towns the Insolvency Act, 11 & 12 Viet. c. 21, and 
the Provincial Insolvency Act, 1907, as regards those portions of British 
India to which the Insolvency Act does not apply. See also the notes to 
ss. 39 and 97. 

38. Where a promisor has made an offer of perform- 
ance to the promisee, and the offer has not 

Effect of refusal . 

to accept offer of been accepted, the promisor is not responsible 

performance. , . , 

tor non-performance, nor does he thereby lose 
his rights under the contract. 



(u) The passage referred to is as follows : he could perform the contract by C.'s 
" it has always been held in the Court of agency and authorise C. to receive pay- 
Chancery . . . that the assignment of a ment ; or, when B's undertaking to pay 
chose in action, founded on a valuable for the shares had become a debt, he 
consideration, ought to be enforced. So could assign the debt to C. The report 
the Court of Chancery has given effect to fails to show which of these things he 
assignments of every kind of future and really did, but it is not strictly material 
contingent interests and possibilities in to the decision of the High Court, 
real and personal property, if made for It remains true, as Farran, J., most 
valuable consideration." This obviously correctly said about twenty years later in 
relates to the transfer of rights and not the same Court, Tod v. Lakhmidas, 16 
to the delegation of duties. The state- Bom, 441, 449, that "a purchaser is 
ment itself is elementary. All that the entitled to call upon the person with 
case decides, in point of law, is that the whom he contracted to fulfil his contract, 
District Judge was wrong in laying down and the latter cannot get rid of his liability 
as an unqualified proposition that the by transferring it to a third person, but 
contract was not assignable. A. could must himself perform the contract person- 
not, of course, delegate his duty under the ally or vicariously." 
contract to C, without B.'s consent. But 

i.e. 14 



210 THE INDIAN CONTRACT ACT. 

S. 38. Every such offer must fulfil the following conditions : 

(1) it must be unconditional : 

(2) it must be made at a proper time and place, and 
under such circumstances that the person to whom it is made 
may have a reasonable opportunity of ascertaining that the 
person by whom it is made is able and willing there and then 
to do the whole of what he is bound by his promise to do : 

(3) if the offer is an offer to deliver anything to the 
promisee, the promisee must have a reasonable opportunity 
of seeing that the thing offered is the thing which the 
promisor is bound by his promise to deliver. 

An offer to one of several joint promisees has the same 
legal consequences as an offer to all of them. 

Illustration. 

A. contracts to deliver to B. at his warehouse, on the 1st March, 
1873, 100 bales of cotton of a particular quality. In order to make 
an offer of performance with the effect stated in this section, A. must 
bring the cotton to B.'s warehouse, on the appointed day, under such 
circumstances that B. may have a reasonable opportunity of satisfying 
himself that the thing offered is cotton of the quality contracted for, 
and that there are 100 bales. 



Tender. The subject-matter of the present section is to be found 
under the head of Tender in English books. 

The first sub-section is chiefly, though not exclusively, appropriate to 
an offer of payment ; the second and third concern offers of other kinds of 
performance, such as delivery of goods. 

The principles were laid down in England two generations ago in 
Startup v. Hacdonald (x) : " The law considers a party who has entered 
into a contract to deliver goods or pay money to another as having sub- 
stantially performed it, if he has tendered the goods or money to the party 
to whom the delivery or payment was to be made, provided only that the 
tender has been made under such circumstances that the party to whom 
it has been made has had a reasonable opportunity of examining the goods 
or the money tendered, in order to ascertain that the thing tendered 
really was what it purported to be." As to what are proper time and place 
see ss. 46 49, pp. 237240, below. 

() (1843) 5 Man. & G. 693, 610 ; 64 R. R. 810, 824, judgment of Rolfe, B. 



OFFER OF PERFORMANCE. 211 

Offer must not be of part only. With regard to the validity of an S. 38. 
offer of performance, it must be not only unconditional, but entire ; that is, 
it must be an offer of the whole payment or performance that is due (/). 
Words to this effect were in the corresponding clause in the original draft 
of the Act, and it is not easy to see why they are not as prominent in the 
section as finally settled. The substance of the rule is, however, in force 
in British India. It is needless to consider whether this is because the Act 
does not expressly negative the English rule as already adopted, or because 
of the words " the whole of what he is bound by his promise to do " in 
sub-s. (2), or because an offer to pay or perform only in part is not really 
" an offer of performance " of an entire promise at all. Whatever 
the reason may be, it has been held by the Higli Court of Calcutta 
that a creditor is not bound to accept a sum smaller than he is entitled 
to, and therefore the tender of such a sum does not stop interest running 
on it (z). 

In Haji Abdul Rahman v. Haji Noor Mahomed (a), in the High Court 
of Bombay, the defendant had tendered a sum which was only a small 
fraction of the whole sum claimed and found due, and one question in the 
case was whether interest was due, after the date of this offer, on the whole 
sum or only on the residue. Telang, J., thought that the rule in Dixon v. 
Clark (Jb], that a tender of part of an entire debt is bad, applied only to 
cases where the party making the tender admitted more to be due than 
was tendered, and that it had no application where the debtor tendered 
the amount as in full payment of the debt. The Court, however, decided 
against the defendant on the ground that the tender was ineffectual, as it had 
not been followed by a payment into Court in the suit, as required by an 
established rule of practice. This opinion of Telang, J., appears, with 
great respect, to be founded on a misconception both of the principle 
involved and of the English authorities. A creditor is not bound to 
accept less than is actually due and payable, and therefore by refusing to 
accept only a portion of the principal he cannot lose his right to interest 
on that portion where interest is otherwise payable. A so-called tender of 
less than the debtor admits to be due is not a tender at all, but an offer of 
payment on account, which the creditor may accept or not, and risks 
nothing, in point of law, by not accepting, though it is often, in point of 
fact, unwise not to take what one can get. Tender is, one may almost say, 
essentially the offer of a sum which the debtor asserts to be the whole sum 

(y) Dixon v. Clark (1848) 5 C. B. 365. 3 Cal. 468. 

(z) Watson % Co.v.Dhonendra Chunder (a) (1891) 16 Bom. 141, 147149. 

Mookerjee (1877) 3 Cal. 6, 16 ; Chunder (b) 5 C. B. 365 ; 16 L. J. C. P. 237. 
Caunt Mookerjee v. Jodoonath A7(M(1878) 

142 



212 THE INDIAN CONTRACT ACT. 

S. 38. due, but which is less than the creditor claims ; for if the parties are agreed 
on the amount due, a formal offer is needless and useless. This being so, 
the creditor refuses the money at his peril in case his further claim turns 
out unfounded ; but if he accepts, the debtor is still only offering what is 
due, and the creditor is not bound to make any admission in return. He 
may take the debtor's offered payment without prejudice to his claim, such 
as it may be, to a further balance. The debtor is entitled to a receipt for 
what he pays, but not to a release. It remains to be seen whether there 
was a discharge or only a payment on account. Hence a tender will be 
vitiated by the addition of any terms which amount to requiring the 
creditor to accept the sum offered in full satisfaction, or to admit in any 
other way that no more is due. 

Offer must be unconditional. " The person making a tender has a 
right to exclude presumptions against himself by saying : ' I pay this as 
the whole that is due ' : but if he requires the other party to accept it as 
all that is due, that is imposing a condition ; and, when the offer is so 
made, the creditor may refuse to receive it as a tender " (c). 

A mere specifying of the account on which a payment is offered, 
though accompanied by such words as " in settlement " or the like, 
does not amount to a condition in this sense ; for it is no more than 
saying that the debtor offers all that he believes to be due (c). More 
than this, a debtor may tender, expressly under protest, a greater sum 
than he admits to be due, and thus reserve the right of taking further 
proceedings to test the justice of the claim. Such a protest does 
not impose any condition. " The creditor has only to say, ' I take the 
money ; protest as much as you please,' and neither party makes any 
admission " (d). A tender of debt before the due date is not a valid tender, 
and will not prevent interest from running on the loan (0). 

There are no recent English cases on tender of money debts, and the 
habits of modern business appear to have greatly diminished the importance 
of the subject (/). 

Able and willing. Where a contract for the purchase and sale of 
Government paper provides for the delivery of the paper to the defendant, 
it is not necessary that the plaintiff should have taken the Government 
paper contracted for to the place of business of the defendant and then and 
there made an actual tender of it. If the plaintiff was ready and willing 
to perform his part of the contract and did his best to inform the 

(c) Eowenv. Owen (1817) 11 Q. B. 130, (e) Eshahuq Molla v. Abdul Sari 
136, per Erie, J. Haldar (1904) 31 Cal. 183. 

(d) Scott v. Uxbridge and Richmana- (/) As to tender preventing an act of 
worth R. Co. (1866) L. R. 1 C. P. 596, bankruptcy, see Ex yarte Danlts (1852) 2 
599, per Willes, J. D. M. & G. 936, 95 R. R. 376. 



OFFER OF PERFORMANCE. 213 

defendant by going to his place of business that he was so, that would be S. 38. 
sufficient, in the absence of evidence to the contrary, to constitute readiness 
and willingness (g). Where a contract is made for the future delivery of 
shares, and the purchaser, before the delivery day, gives notice to the 
vendor that he will not accept the shares, the vendor is thereby exonerated 
from giving proof of his readiness and willingness to deliver the shares, 
and the issue as to readiness and willingness is in such a case immaterial (h). 
As to repudiation of a contract by one party before the time for performance, 
see farther on, s. 39, p. 220, below. 

Tender of instalments. A contract made between the plaintiff and 
the defendant stipulated for delivery to the defendant of 7,500 bags of 
Madras coast castor seed, which were to be shipped per "steamers," and 
then stated that shipment of 2,500 bags was to be made in December. Of 
these 1,690 bags arrived on 12th December, and the plaintiff offered 
delivery thereof to the defendant, who refused to take them on the ground 
that he was not bound to take less than the whole of the 2,500 bags at one 
time. The bags were thereupon resold by the plaintiff. The remain- 
ing 810 bags, being the balance of the December shipment, arrived on 19th 
December, but were refused by the defendant on the same ground as 
before, and those also were accordingly resold by the plaintiff. The plain- 
tiff sued the defendant for damages for breach of the contract in not 
accepting the bags. The Court held without difficulty that there was a 
legal and proper tender of the December shipment by the plaintiff according 
to the terras of the contract (i). A lender is entitled to decline, in the 
absence of any agreement as to repayment of the loan, to receive payment 
of the sum due to him in instalments, and he can claim that the whole sum 
due be paid at one and the same time (&). 

Reasonable opportunity. In a Bombay case (/) the defendant agreed 
to purchase from the plaintiffs 100 bales " fully good fair Kishli cotton," 
to be delivered from 15th March to 1st April, 1881. On 30th March the 
plaintiffs sent the defendant a letter enclosing a sampling order, which was 
received by the defendant's agent at 11.30 a.m. that day. The defendant 
got samples taken of the cotton, and a dispute having arisen as to the 
quality and classification of the cotton, the plaintiffs wrote to the defendant 

(g) Juggernautli Sew Bux v. Ram Dyal 9 Cal. 473. Brandt v. Lawrence (1876) 1 

(1883) 9 Cal. 791. Q. B. Div. 344, which the Court cited and 

(/(.) Dayabkai Dipchand v. Maniklal followed, was a similar case. 
Vrijbhtiitan (1871) 8 B. H. C. A. C. 123. (&) Beliarl Lai v. Ram Ghulam (1902) 

See also Dayabhai Dipchand v. Dullabli- 24 All. 461. 

ram Dayaram (1871) 8 B. H. C. A. C. (T) Ruttonsey v. Jamnadas (1882) 6 

133. Bom. 692. 

(?') Sim-son v. Gora CJiand Doss (1883) 



214 THE INDIAN CONTRACT ACT. 

S. 38. on 31st March asking him to attend with his surveyor at 1 p.m. on that 
day to survey the cotton, as otherwise an ex parte survey would be held. 
It being a mail day, the defendant's surveyor could not attend at the 
appointed hour, and the plaintiffs had an ex parte survey held by their own 
surveyors, and they pronounced the cotton to be of the description 
contracted for. Shortly afterwards the defendant asked for a survey by a 
letter which reached the plaintiffs at 2.19 p.m. on that day. The plaintiffs 
did not comply with the application, and called upon the defendant to take 
delivery of the goods. In a suit by the plaintiffs for damages for breach 
of the contract it was contended for the defendant that no reasonable 
opportunity was afforded to the defendant to examine the goods, as there 
was no joint survey, and that the time allowed by the plaintiffs for the 
examination of the cotton was not sufficient. It was held that the 
defendant had reasonable opportunity within the meaning of this section.* 
Latham, J., said: "The rule in the 38th section of the Contract Act 
agrees with the rule of English law laid down in Benjamin on Sales 
(2nd ed. pp. 573 and 576) (m) ; but there is little authority as to what is a 
reasonable opportunity of inspection (n). ... In the present case the 
sampling order was delivered to the defendant by 11.30 a.m. on the 30th 
March, and he had till 1 p.m. on the 31st March before any refusal by the 
plaintiffs to allow a further examination is alleged. Now Vizbhookandas 
Atmaram seems to have been certainly dilatory in his examination, he not 
having compared the samples with the standards till past noon on the 31st ; 
and it seems to me that a period of over twenty-four hours gave a reason- 
able opportunity to see whether the cotton offered was the cotton which 
the plaintiffs were bound by their contract to deliver. 

" Then are we to go further and to say that the purchaser is entitled to 
continue inspecting and examining until the expiration of the period for 
delivery ? I find no authority for this, and in many cases it would be 
unreasonable to place no limit on the inspection. Is a purchaser at liberty 
to open and taste every bottle of wine in a lot sold, or in the present case 
to pass every pound of cotton through an expert's hands ? There must be 
some limit, and I think that a reasonable opportunity is the limit alike for 
vendor and purchaser, and that such a reasonable opportunity had been 
had by 1 p.m. on the 31st March." 

(m) 696, 704, 4th ed. that the person who is to pay for the 

() Isherwood v. Whit'more (1843) 11 goods shall have an opportunity afforded 

M. & W. 347, 63 R. R. 624, seems to be the him, before he is called on to part with 

only case in point. " A tender of goods his money, of seeing that those presented 

does not mean a delivery or offer of for his acceptance are in reality those for 

packages containing them, but an offer of which he has bargained " : per Parke, B. 
those packages under such circumstances 



TENDER. 215 

Tender of money. A creditor is not bound to accept a cheque ; but Ss. 38, 39. 
if a cheque is tendered and received, and the creditor or his agent objects 
only to the amount, or makes no immediate objection at all, he cannot 
afterwards object to the nature of the tender. 

The landlord of a house, through his agent, sent in rent-bills to his 
lessee. The lessee gave the agent a cheque in favour of her attorney for 
the amount demanded, and obtained a receipt from him. The landlord's 
agent then took the cheque to the lessee's attorney, who cashed it and 
handed the amount to the agent, and requested him to get the rent-bills 
receipted and returned to him. The landlord's solicitor, to whom the 
money was taken, refused to accept it, and the money was then returned 
to the lessee's attorney. In a suit by the landlord for the rent, it was held 
that under the circumstances the tender amounted to payment, and the 
suit was dismissed with costs (0). 

Legal tender. As to tender of coinage see Indian Coinage Act 
XXXIII of 1870 (amended by Act VIII of 1893 and Act XXII of 1899), 
ss. 12 14 ; and as to tender of currency notes, see Paper Currency 
Act XX of 1882, s. 16, as amended by Act VI of 1903, s. 2. 

Offer to one of several joint promisees. A tender of rent by a 
lessee to one of several joint lessors (p ) and of a mortgage debt by a 
mortgagor to one of several mortgagees (q) would be a valid tender under 
this section. See the commentary on s. 45. 

39. When a party to a contract has refused to perform, 
or disabled himself from performing his 

Effect of refusal ... 

of party to perform promise in its entirety, the promisee may put 
an end to the contract, unless he has signified, 
by words or conduct, his acquiescence in its continuance. 

Illustrations. 

(a) A., a singer, enters into a contract with B., the manager of a 
theatre, to sing at his theatre two nights in every week during the 
next two months, and B. engages to pay her 100 rupees for each night's 

(o) Bolye Chutid Sing v. Moulard Chinnaramanuja Ayyangar v. Padma- 

(1878) 4 Cal. 572. Cp. Jones v. Arthur nabha Pillaiyan (1896) 19 Mad, 471. 

(1840) 59 E. R. 833, 8 Dowl. Pr. Ca. 442. (q) See Barber Maran v. Ramana 

(_p) Krishnarav v. Manaji (1874) 11 Goundan (1897) 20 Mad. 461, where it 

B. H. C. 106, where it was held that pay- was held, relying upon this section 

ment of rent by a lessee to one of several principally, that payment of the amount 

joint lessors discharges the debt as to all. due on a mortgage by a mortgagor to one 

But payment to a partner in fraud of his of several mortgagees discharges the 

co-partners is not a valid discharge : mortgage debt as to all. 



THE INDIAN CONTRACT ACT. 

performance. On the sixth night A. wilfully absents herself from the 
theatre. B. is at liberty to put an end to the contract. 

(b) A., a singer, enters into a contract with B., the manager of a 
theatre, to sing at his theatre two nights in every week during the 
next two months, and B. engages to pay her at the rate of 100 rupees 
for each night. On the sixth night A. wilfully absents herself. With 
the assent of B., A. sings on the seventh night. B. has signified his 
acquiescence in the continuance of the contract, and cannot now put 
an end to it, but is entitled to compensation for the damage sustained 
by him through A.'s failure to sing on the sixth night. 



Refusal to perform contract. It is not easy to see why this section 
is placed here. The subject-matter would seem really to belong to the 
category of contracts, not which must, but which need not, be performed, 
dealt with in ss. 62 67, pp. 261 285, below. Further, it is closely 
connected with the consequences of breach of contract laid down in 
Chap. VI. However, a commentator must take the Act as he finds it. 

As correctly laid down in the High Court of Calcutta when the Act 
was still recent, "this section only means to enact what was the law in 
England and the law here before the Act was passed, viz., that where a 
party to a contract refuses altogether to perform or is disabled from 
performing his part of it the other side has a right to rescind it " (r). 
English authorities are collected in the notes to Cutter v. Powell in 
Smith's Leading Cases (s). 

The words used by Garth, C.J., " where a party to a contract refuses 
altogether to perform . . . his part of it," clear up a slight verbal 
ambiguity in the Act, where the words "his promise in its entirety" mean 
the substance of the promise taken as a whole. In one sense, refusal to 
perform any part of a contract, however small, is a refusal to perform the 
contract "in its entirety"; but the kind of refusal contemplated by this 
enactment is one which affects a vital part of the contract, and prevents 
the promisee from getting in substance what he bargained for. 

The clearest leading case is perhaps -Withers v. Reynolds (f). The 
action was for not delivering straw to the plaintiff under an agreement 
whereby the defendant was to supply the plaintiff with straw from October, 
1829, to Midsummer, 1830, in specified quantities, and the plaintiff was 
to pay a named sum per load " for each load of straw so delivered," which 
the' Court read as meaning that he was to pay for each load on delivery. 

(r) Per Garth, C.J., in Sooltan Chund some familiarity with the old common 

v. Schiller (1878) 4 Cal. 252, 255. law system of pleading. 

(*) Vol. ii. at p. 9, llth ed. This note, (f) (1831) 2 B. & Ad. 882 ; 36 R. R. 782 ; 

however, is hardly intelligible without Finch, Sel. Ca. 712. 



REFUSAL TO PERFORM CONTRACT. 217 

In January, 1830, the straw having been regularly sent in, and the plaintiff S. 39. 
being in arrear with his payments, "the defendant called upon him for 
the amount, and he thereupon tendered to the defendant 111. 11s., being 
the price of all the straw delivered except the last load, saying that he 
should always keep one load in hand." The defendant took this payment 
under protest, and refused to deliver any more straw unless it was paid. for 
on delivery. The Court held that this gave the plaintiff no right of 
action, in other words that the defendant was entitled to put an end to 
the contract. As Parke, J. (as he was then, afterwards better known as 
Baron Parke), said, " the substance of the agreement was that the straw 
should be paid for on delivery. . . . When, therefore, the plaintiff said 
that he would not pay on delivery (as he did, in substance, when he insisted 
on keeping one load in hand), the defendant was not obliged to go on 
supplying him/' It is to be observed that, as Patteson, J., added, "if the 
plaintiff had merely failed to pay for any particular load, that of itself 
might not have been an excuse to the defendant for delivering no more 
straw." Later English' authorities have in fact established that mere 
failure to make one of a series of payments will not generally, in the 
absence of a prospective refusal, discharge the other party from proceeding 
with the contract (u). 

As to failure in performing other particular terms of a contract, no 
positive general rule can be laid down as to its effect. . The question is in 
every case whether the conduct of the party in default is such as to amount 
to an abandonment of the contract or a refusal to perform it, or, having 
regard to the circumstances and the nature of the transaction, to " evince 
an intention not to be bound by the contract " (x). It seems, however, 
with great submission, that the intention which is material is not that 
with which the contract is broken, but that with which it was made. 
Parties can undoubtedly make any term essential or non-essential ; they 
can provide that failure to perform it shall discharge the other party from 
any further duty of performance on his part, or shall not so discharge him, 
but shall only entitle him to compensation 'in damages for the particular > 
breach. Omission to make the intention clear in this respect is the cause I 
of the difficulties, often considerable, which the Courts have to overcome I 
in this class of cases. 

(n) Freeth v. Burr (1874) L. K. 9 C. P. what amounts to a 'refusal ' in cases of 

208, Finch, Sel. Ca. 714 ; Mersey Steel and this class " : per Maclean, C.J., in Rash 

Iron Co. v. Naylor ,* -Benson fy Co. (1884) Bcltary Shaha v. Nrlttya 6 opal Nundy 

9 App. Ca. 434. "These cases were (1906) 33 Cal. 477, at p. 481. 

determined after the passing of the Indian (>} L. R. 9 C. P. 213, 214; and see 

Contract Act, but the views of the learned Pollock on Contract, 259, 272. 
judges are useful guides in determining 



THE INDIAN CONTRACT ACT. 

S. 39. In Sooltan Chund v. Schiller (y) the defendants agreed to deliver to 

the plaintiffs 200 tons of linseed at a certain price in April and May, the 
terms as to payment being cash on delivery. Certain deliveries were made 
by the defendants between the 1st and 8th of May, and a sum of Ks. 1,000 
was paid on account by the plaintiffs, which left a large balance due to 
the defendants in respect of linseed already delivered. This balance was 
not paid, and the defendants thereupon wrote to the plaintiffs cancelling 
the contract and refusing to make further deliveries under it. The 
plaintiffs answered expressing their willingness to pay on adjustment of a 
sum which they claimed for excess refraction and an. allowance for some 
empty bags. The defendants stated that they would make no further 
delivery, and the plaintiffs thereupon bought in other linseed and sued the 
defendants for damages for non-delivery of the remaining linseed. Upon 
these facts it was held, following Freeth v. Burr(z), that there was no 
refusal on the part of the plaintiffs to pay for the linseed delivered to 
them, as they were willing to pay the sum due as soon as their cross- 
claims were adjusted. As to illustration (b) to the section it was said : 
" That illustration is perhaps not a happy one, because it may lead, as I 
think it has led in this instance, to misapprehension. But the difference 
between that case and this is clear enough. The singer by wilfully 
absenting herself, though on one night only, did in fact refuse altogether 
to perform an integral and essential part of her contract. By doing so she 
put it out of her power to perform her contract in its entirety. But here the 
plaintiffs have never refused to perform any part of their contract. They were 
willing to pay the sum due as soon as their cross-claims were adjusted ; 
and their default consisted in not paying for the linseed on delivery " (a). 

It may be further observed, with regard to the illustrations, that it 
would be rash to extend them. In England it has been held that a singer 
engaged to perform in concerts as well as in operas who has agreed, 
amongst other things, to be in London six days before the beginning of 
his engagement, for the purpose of rehearsals, does not, merely by failing 
to be in London at the time so named, entitle the manager to put an end 
to the contract (V). Wrongful dismissal of an employee has, on the other 
hand, been held to determine not only the contract of service, but a term 
restraining the employee from carrying on the same business after its 
termination (66). In reading the illustrations to the Act, so far as they 
bear on questions of construction, it must be assumed that there are not 

(y) (1878) 4 Cal. 252. See also Simson (a) Per Garth, C.J., 4 Cal., at p. 256. 

v. Virayya (1886) 9 Mad. 359 ; and (V) Bettini v. Gye (1876) 1 Q. B. D. 

Volkart Bros. v. Rutna Velu Chetti (1894) 183, Finch, Sel. Ca. 742. 

18 Mad. 63. (7>J) General Billposting Co. v. Atkin- 

(--) L. R. 9 C. P. 208. son [1909] A. C, 118. 



DISABILITY TO PERFORM CONTRACT. 



219 



any terms beyond those stated ; the agreements met with in practice will 
almost always contain special terms, which must be considered. 

The principles set forth above were recently applied by the High 
Court of Calcutta in a case where the plaintiff had agreed to purchase from 
the defendant 300 tons of sugar, "the shipment [to] be made during 
September and October next in lots of about 75 tons in a shipment," the 
terms as to payment being cash before delivery. Notice of the arrival of 
the September shipment was given to the plaintiff, and he was called upon 
to pay before delivery. The plaintiff was unable to pay, and asked for 
time, but the defendant would not give it, and ultimately wrote to the 
plaintiff stating that he had cancelled the contract. On the arrival of the 
October shipment the plaintiff tendered payment for the same, but the 
defendant refused to accept the money, saying that the contract had been 
cancelled. The plaintiff thereupon sued the defendant for damages for 
refusing to deliver the October shipment. It was held in accordance with 
the English authorities that mere failure on the part of the plaintiff to 
pay for and take delivery of the September shipment did not amount to 
"a refusal" to perform the contract within the meaning of this section so 
as to entitle the defendant to rescind the contract, and that it did not 
exonerate him from delivering the October shipment (c). 

"Disabled himself from performing." Disability due to the party's 
own fault must be distinguished from inability to perform a contract. See 
Specific Eelief Act, s. 14, as to the effect of inability of a party to perform 
the whole of his part of a contract. See also s. 24 of the same Act, which 
enacts, amongst other things, that specific performance of a contract cannot 
be enforced in favour of a person who has become " incapable " of performing 
any essential term of a contract that on his part remains to be performed. 

It is very old law that if a promisor disables himself from performance, 
even before the time for performance has arrived, it is equivalent to a 
breach (d). In a modern English case (e) the defendant promised the 
plaintiff, his intended wife, in consideration of the marriage which after- 
wards took place, to leave a certain house and land to her by will for her 
life. After the marriage he sold the property to a third person. The 
Court, having decided on the facts that there was a contract, held that the 
plaintiff was entitled to treat the defendant's conveyance to a stranger as 
an immediate breach and to sue for damages. In a Madras case, under 
the terms of a mortgage for Rs. 800, the mortgagee advanced Rs. 300 to 
the mortgagor and agreed to pay the balance to a prior mortgagee of the 



S. 39. 



(tf) Rasli Behary Shaha v. JVrittya 
Gopal Nundy (1906) 33 Cal. 477. 

(d) See 3 Encycl. Laws of England, 
350 (548, 2nd ed.) ; Pollock on Contract, 



428 ;Anson 318, llth ed. 

00 Synge v. Synge [1894] 1 Q. B. 466, 
C. A. 



220 THE INDIAN CONTRACT ACT. 

S. 39. same property. The mortgagee failed to pay the balance according to the 
agreement, and the prior mortgagee sued the mortgagor and recovered the 
debt by attachment and sale of the mortgagor's movable property. About 
eight years after the date of the mortgage the mortgagee sued the mortgagor 
for interest due under the mortgage on Rs. 300 only. It was held (/) that 
under the circumstances the mortgagor was entitled to rescind the mortgage 
under this section " on the ground that the mortgagee by acting in contra- 
vention of his agreement incapacitated himself from performing it in its 
entirety " (g ), and that he was not entitled to treat the original mortgage as 
still in force so as to enable him to sue for the interest alone. The Court, 
however, expressed the opinion that in putting an end to the mortgage the 
mortgagor was bound to give up the benefit he had received under the mort- 
gage and to pay back Rs. 300 with interest up to date of cancellation (li). 
"Without disputing 'the correctness or the substantial justice of the decision, 
one may be allowed to think that the application of the present section 
was somewhat forced. It was made by only one member of the Court. 

"Promisee may put an end to the contract." The common law 
rights of a promisee on refusal by the promisor to perform his promise 
were thus stated by Scotland, C.J., in a Madras case(*) decided in 1863, 
and the statement remains applicable under the Act : 

"If a vendor contract to deliver goods within a reasonable time, 
payment to be made on delivery, and before the lapse of that time, before 
the contract becomes absolute, he says to the purchaser, ' I will not deliver 
the goods,' the latter is not thereby immediately bound to treat the 
contract as broken, and bring his action. The contract is not necessarily 
broken by the notice. That notice is, as respects the right to enforce the 
contract, a perfect nullity, a mere expression of intention to break the 
contract, capable of being retracted until the expiration of the time for 
delivering the goods. It cannot be regarded as giving an immediate right 
of action, unless, of course, tne purchaser thereupon exercise his option to 
treat-trig" contract, as rescinded T when he m,g.y go into the market and 
supply himself with similargoods, and sue upon the contract .at oncejipr 
any damage then sustained. The law on this subject will be found in 
\Leigh v. Paterson (k) and Phillpotls v. Evans (I), the authority of which 
cases was upheld in Hochsler v. De la Tour''' 1 (m). 



(/) Sitbba Rau v. Deru Shetti (1894) 
18 Mad. 126. 

G/) Per Muttusiinri Ayyar, J., at 
p. 127. 

(/<) Sees. 65, p. 278, post. 

(i) Mansuk Das v. Rangayya Chetti, 
1 M. H. C. 162. 

(/O 8 Taunt. 540. 

l*l< fc''^' 



iC 



(0 5 M. & W. 475 ; 52 R. R. 802. It is 
difficult to understand how the learned 
Chief Justice supposed this case to 
anticipate the doctrine of Hocl'ster T. 
De la Tour, to which the judgment of 
Parke, B., is distinctly adverse ; but this 
is of only historical interest. 

(m) 2 E. & B. 678, 95 R. R. 747 ; and 



RIGHT TO RESCIND. 

The last-mentioned case is now generally treated as the leading one 
on "anticipatory breach of contract." The rule shortly indicated by this 
phrase is that on the promisor's repudiation of the contract, even before 
the time for performance has arrived, the promisee may at his option treat 
the repudiation as an immediate breach putting an end to the contract 
for the future and giving^the promisee a right of action for damages. It 
must be remembered that the option is entirely with the promisee. 

A few months before the Contract Act came into force the effects of 
" anticipatory breach " were thus summed up in the Exchequer Chamber 
in England (ti) : 

"The promisee, if he pleases, may treat the notice of intention as 
inoperative, and await the time when the contract is to be executed, and 
then hold the other party responsible for all the consequences of non- 
performance : but in that case he keeps the contract alive for the benefit 
of the other party as well as his own ;" he remains subject to all his own 
obligations and liabilities under it, and enables the other party not only to 
complete the contract, if so advised, notwithstanding his previous repudia- 
tion of it, but also to take advantage of any supervening circumstance 
which would justify him in declining to complete it. 

" On the other hand, the promisee may, if he thinks proper, treat the 
repudiation of the other party as a wrongful putting an end to the contract, 
and may at once bring his action as on a breach of it ; and in such action 
he will be entitled to such damages as would have arisen from the non- 
performance of the contract at the appointed time, subject, however, to 
abatement in respect of any circumstances which may have afforded him 
the means of mitigating his loss." 

It may be worth while to add that an unsuccessful attempt to perform 
a contract which does not disable the promisor from still performing it 
effectually within the time limited, or a reasonable time, and does not 
cause any damage to the promisee, cannot be treated as a refusal. Such an 
attempt does not of itself affect the legal rights of the parties at all (0). 



221 
S. 39. 



see Ripley v. McClure (1849) 4 Ex. 
345, 359, 80 E. R. 593, 604. The 
rule in Hochster v. De la Tour is 
now generally received in America, and 
has been approved and applied by the 
Supreme Court of the United States : 
Roehm v. Horgt (1900) 178 U. S. 1. 

O) Frost v. Knight (1872) L. R. 7 Ex. 
111. The judgment delivered by Cock- 
burn, C.J., is practically, though not 
formally, the judgment of the Court ; see 



at p. 118. The actual points decided 
were that the rule applies to contingent 
promises, and that the contract to marry 
is not excepted from it on any such 
grounds of its special character as were 
suggested in the Court below. See also 
Synge v. Syige (note (e), p. 219, above), 
where, however, it was not necessary to 
rely on the principle to its full extent. 

(<>) See Sorrowman v. Free (1878) 4 
Q. B. Div. 500. 



THE INDIAN CONTRACT ACT. 






S. 39. The election of the plaintiff to treat repudiation of the contract as an 

immediate breach does not affect the measure of damages (see on s. 120, 
below). 

These authorities have been more lately followed in British India. 
Where, according to the custom of the caste to which the plaintiff and the 
defendant belonged, marriages ordinarily took place when the bride was 
between twelve and fifteen years of age, and the plaintiff, who was betrothed 
to the defendant's daughter, required the defendant to fix a date for his 
marriage within a certain period, after which the marriage could not take 
place for eighteen months, owing to the intervention of the Sinhasth year, 
and the girl would then have passed her fifteenth year, it was held that the 
declaration by the girl that she was unwilling to be married for three or 
four years, and by the father that he could not compel her to change her 
mind, was practically a repudiation of the contract of marriage, and 
entitled the plaintiff to damages for the breach (p). 

Contract of service. The illustrations to the section are both 
examples of contracts of service. In Hochster v. De la Tour (q) the defen- 
dant engaged the plaintiff as his courier on a Continental tour from 
June 1 for three months certain at 10 a month. Before that day came 
the defendant changed his mind and wrote to the plaintiff that he did not 
want him. The plaintiff, without waiting further and before June 1, 
sued the defendant for breach of contract. For the defendant it was argued 
that the plaintiff should have waited till June 1 before bringing his 
action, on the ground that the contract could not be considered to be 
broken till then. It was held, however, that the contract had been broken 
by express renunciation, and the plaintiff was not bound to wait until the 
day of performance. The principles enunciated in this case and the others 
underlying the present section were applied by the High Court of Bombay 
in a case where a station-master in the employ of a railway company, 
alleging that he had resigned the service of the company, claimed his share 
of the company's provident fund, but the claim was resisted by the 
company on the ground that he was dismissed from service, and that he 
was not therefore entitled, under the rules of the fund, to more than the 
amount of his subscriptions thereto. One of the questions was whether 
the notice of dismissal, having regard to the date on which it was given, 
operated as a dismissal of the plaintiff. The plaintiff had on February 14 
gone on three months' leave without pay. On May 5 he tendered his resigna- 
tion to the defendant company. On May 13 the company wrote to the 

(p) Purshotamdas Trib/wcandas v. such cases see ib. p. 37, following Umed 
Purshotamdas Mangaldas (1897) 21 Bom. Kika v. Xagindas (1870) 7 B. H. C. 122. 
23, 35. For the form of the decree in (j) (1853) 2 E. & B. 678, 95 R. K. 747. 



WHO SHOULD PERFORM CONTRACT. 223 

defendant that he was dismissed from service. It was contended that there Ss. 39, 40. 

was no such dismissal as disentitled the plaintiff to his full share of the 

fund, first, because he had previously tendered his resignation, and, secondly, 

because the notice of dismissal was given on May 13, that is, before he 

became liable to resume his duties, which was on the 14th. Both these 

contentions were overruled. As to the first contention it was said that, 

there being no contract between the parties that the service should 

terminate on resignation, the resignation did not operate to determine the 

contract unless it was assented to by the other side. As to the other 

contention it was said : " His (plaintiff's) letter of the 5th day of May was 

an intimation of his intention not to perform the services to which he was 

bound. . . . The company only took him at his word . . . and it seems 

to me that there was on the 13th an anticipatory breach which in the events 

entitled them to determine the contract by dismissing the plaintiff" (r). 

Insolvency of promisor. This is not of itself equivalent to a total 
refusal to perform the contract, though it may be accompanied by conduct 
which amounts to a notice of the insolvent debtor's or his representative's 
intention not to pay his debts or perform his contracts. A seller, however, 
is not bound to go on delivering goods to an insolvent buyer (s). The 
proofs and illustrations belong to the special subject of Sale of Goods, and 
will be found collected under s. 97, below. 

By ivhom Contracts must be Performed. 

40. If it appears from the nature of the case that it 
was the intention of the parties to any con- 

Person by whom 

promise is to be tract that any promise contained in it should 

performed. -111 

be performed by the promisor himself, such 
promise must be performed by the promisor. In other cases, 
the promisor or his representatives may employ a competent 
person to perform it. 

. Illustrations. 

(a) A. promises to pay B. a sum of money. A. may perform this 
promise, either by personally paying the money to B. or by causing 
it to be paid to B. by another ; and, if A. dies before the time 

(r) Ganesh Ramchandra v. G. I. P. the plaintiff had said " I shall not return 

Ry. Co. (1900) 2 Bom. L. R. 790. This to your service, whether you accept my 

appears a strange decision, for if the resignation or not. " 

resignation was inoperative there was no (*) Ex part e Clmlmers (1873) L. R. 8 

breach at all. There might have been if Ch. 289. 



224 THE INDIAN CONTRACT ACT. 

S. 40. 'appointed for payment, his representatives must perform the promise, 

or employ some proper person to do so. 

(b) A. promises to paint a picture for B. A. must perform this 
promise personally. 

Personal contracts. Contracts involving the exercise of personal 
skill and taste, or otherwise founded on special personal confidence between 
the parties, cannot be performed by deputy. But it is not always easy to 
say whether a particular contract is, in this sense, personal or not, or what 
is an adequate performance of a personal contract. The hiring of a carriage 
from Sharpe, a coachmaker trading under his own name alone, but in fact 
with a partner, was held to be a personal contract, which the hirer was not 
bound to go on with after Sharpe had retired from business. " He may 
have been induced to enter into the contract by reason of the confidence 
he reposed in Sharpe, and at all events had a right to his services in the 
execution of it." (/). .This has been considered an extreme application of 
the principle (u), which ought to be applied only where the contract really 
and substantially has relation to the personal conduct of the contracting 
party (). A contract for personal agency or other service entered into 
with partners is generally determined by the death of a partner, or it may 
be more accurate to say that it is not held to continue with the surviving 
partner unless there is something to show a distinct intention to that 
effect (y). On the other hand, a contract with a firm which has nothing 
really personal about it so far as regards the partners, for example a 
contract to perform at a music-hall belonging to the firm, is not generally 
determined by the death of one member of the firm, especially if the 
individual members of the firm were not named in the contract and not 
known to the other party (0). Every case must really be judged on its own 
circumstances. 

The illustrations to the section look obvious enough. But the second 
is not quite so simple as it looks. Suppose A. is not a painter, but a 
sculptor. Must A. chisel the whole of his statue in the marble with his 
own hand, or, if the statue is to be in bronze, must he cast it himself ? 
According to all modern usage, he is clearly not bound to do so ; he is 

(t) Robson v. Dr-ummond (1831) 2 B. [1901] 1 K. B. 59. The defendants were 

& Ad. 303, 3o E. R. 569, 572. undisclosed partners trading under a 

(u) British Waggon Co. v. Lea $ Co. quasi-corporate name ; the plaintiffs were 

(1880) 1 Q. B. D. 149, 152. a troupe of performers, but nothing turns 

(x) Phillips v. Alhambra Palace Co. on their number. If one of the plaintiffs 

[1901] 1 K. B. 59. had died the case would have been 

(y) Tasker v. Shepherd (1861) 6 H. & different, as they had undertaken active 

N. 575. and personal performances. 

(-) Phillipy v. Allutnibra Palace Co. 



WHO SHOULD PERFORM CONTRACT. 225 

expected to design and supervise the work, but the manual execution will be Ss. 40 42 . 

done, subject to the master's final touches, by skilled workmen. Benvenuto 

Cellini cast his own Perseus ; Mr. Thornycroft did not cast his own King 

Alfred. Again, A. is a painter commissioned to carry out a great mural 

decoration. Must he actually hold the brush that lays on every square 

inch of paint ? Certainly that was not the understanding of the great 

European painters of the sixteenth and seventeenth centuries and their 

patrons ; the less important parts of the work were executed by pupils and 

assistants under the master's direction, and it would have been impossible 

to get the work done otherwise. Still the master was bound to perform 

his promise personally in the sense that he could not delegate the design 

or general supervision to a junior. In ascertaining what is contemplated 

by the parties, usage as well as the express terms must be regarded. 

Ordinary contracts for delivery of goods, payment for them and the 
like, may of course be performed by deputy (a). " There is clearly no 
personal element in the payment of the price " (#). See notes under the 
same head to s. 37, pp. 202 209, above. 

41. When a promisee accepts performance of the 

Effect of accept- promise from a third person, he cannot after- 
ing performance T e i_ j. i 

from third person, wards enforce it against the promisor. 

There is English authority to the effect that discharge of a contract by 
a third person is effectual only if authorised or ratified by the debtor; but 
it is not clear that the better modern opinion is not the other way (c). In 
India there is no occasion to discuss the point, as the words of the Act 
leave no room for doubt. Op. the Negotiable Instruments Act, 1881, s. 113. 

42, When two or more persons have made a joint 
Devolution of promise, then, unless a contrary intention 
joint liabilities. appears by the contract, all such persons, 
during their joint lives, and after the death of any of them, 
his representative jointly with the survivor or survivors, and 
after the death of the last survivor, the representatives of 
all jointly, must fulfil the promise. 

This is a deliberate variation of the Common Law rule. In England 
" upon the death of one of several joint contractors the legal liability under 

() Tod v. Lakhmidas (1892) 16 Bom. Cement Manufacturers [1902] 2 K. B. 

441, 451 ; but authority is really needless, 660, 672, per Collins, M.R. 

even if illustration (a) did not cover it. (c) See Leake, 647, 648, 5th ed. ; Pol- 

(&) Tolhurst v. Associated Portland lock, 470. 

i.e. 15 



226 THE INDIAN CONTRACT ACT. 

Ss. 42, 43. the contract devolves on the survivors ; and the representative of the 
deceased cannot be sued at law either alone or jointly with the survivors. 
Consequently the whole legal liability ultimately devolves upon the last 
surviving contractor, and after his death upon his representatives " (d). 
Limited exceptions have been introduced by Courts of Equity, and in 
particular a deceased partner's estate is liable, subject to the prior payment 
of his separate debts, for the unsatisfied debts of the firm (e). Parties can, 
of course, make their contracts what they please ; but the presumption 
established for British India by the present section appears to be more in 
accordance with modern mercantile usage. 

43, When two or more persons make a joint promise, 

AU one of "oint the Promisee may, in the absence of express 

promisors may be agreement to the contrary, compel any one or 

compelled to per- 
form, more (/) of such joint promisors to perform 

the whole of the promise. 

Each of two or more joint promisors may compel 
every other joint promisor to contribute 

Each promisor i i -IF , i < < 

may compel con- equally with himselt to tne performance ot 

tribution. , , . , .... 

the promise, unless a contrary intention 
appears from the contract. 

If any one of two or more joint promisors makes default 
in such contribution, the remaining joint 

Sharing of loss . 

by default in con- promisors must bear the loss arising from such 

tribution. n . . . , , 

default in equal snares. 

Explanation. Nothing in this section shall prevent a 
surety from recovering from his- principal payments made by 
the surety on behalf of the principal, or entitle the principal 
to recover anything from the surety on account of payments 
made by the principal. 

Illustrations. 

(a) A., B., and C. jointly promise to pay D. 3,000 rupees. D. may 
compel either A. or B. or 0. to pay Mm 3,000 rupees. 

(Y7) Leake, 298. generally supposed to be joint and several 

(e) Partnership Act, 1890, s. 9, follow- for all purposes. 

ing the decision of the House of Lords in (/) The words " or more " have been 

Kendall v. Hamilton (1879) 4 App. Ca. inserted by the Repealing and Amending 

504,. before which partnership debts were Act (XII of 1891). 



JOINT PROMISORS. 227 

(b) A., B., and C. jointly promise to pay D. the sum of 3,000 S. 43. 
rupees. C. is compelled to pay the whole. A. is insolvent, but his 

assets are sufficient to pay one-half of his debts. 0. is entitled to 
receive 500 rupees from A.'s estate, and 1,250 rupees from B. 

(c) A., B., and C. are under a joint promise to pay D. 3,000 rupees. 
0. is unable to pay anything, and A. is compelled to pay the whole. 

A. is entitled to receive 1,500 rupees from B. 

(d) A., B., and 0. are under a joint promise to pay D. 3,000 
rupees, A. and B. being only sureties for 0. 0. fails to pay. A. and 

B. are compelled to pay the whole sum. They are entitled to recover 
it from 0. 



Joint promisors. The series of sections now before ns materially 
varies the rules of the Common Law as to the devolution of the benefit of 
and liability on joint contracts (g). As far as the liability under a contract 
is concerned, it appears to make all joint contracts joint and several (Ji). 
It allows a promisee to sue such one or more of several joint promisors 
as he chooses, and excludes the right of a joint promisor to be sued along 
with his co-partners ('). There is still considerable difference of opinion 
in the Indian High Courts as to its consequential operation where a 
judgment has been obtained against some or one of joint promisors, and 
the decisions must be 'examined. We think it the better opinion that 
the enactment should be carried out to its natural consequences, and that, 
notwithstanding the English authorities founded on a different substan- 
tive rule, such a judgment, remaining unsatisfied, ought not, in British 
India, to be held a bar to a subsequent action against the other promisor 
or promisors. 

Effect of decree against some only of joint promisors. In Hemendro 
Coomar Mullick v. Rajendrolall Moonshee (j ), it was held by the High Court 
of Calcutta, following the rule laid down in King v. Hoare (&), that a 
decree obtained against one of several joint makers of a promissory note 
is a bar to a subsequent suit against others. This was followed by the 
High Court of Madras in a similar case in Gursami CMti v. Samurti 
Chinna (Z). But these decisions were dissented from by Strachey, C.J., in 
Muhammad Askari v. Radhe Ram Singh (m}. In that case the question 
was whether a judgment obtained against some of several mortgagors and 

(//) Lultmidas Kliimjl v. Purshotam Singh (1900) 22 All. 307, 315 ; Dick v. 

Jft/riiJas (1882) 6 Bom. 700, 701. Dhuiiji Jaltlut (11)01) 25 Bom. 378, 380. 

(//) MotUnl Jieclianldxx v. GhellaWuti (,/ ) (1878) 3 Cal. 353. 

ITuri m m (1892) 17 Bom. 0, 11. (It) (1844) 13 M. & W. 494; 67 II. 11. 

(/) Ilcincndro Coomar Mullick v. 694. 

Rajendrolall Moonshee (1878) 3 Cal. 353, (0 (1881) 5 Mad. 37. 

360 ; Muhammad Askari v. lladhe Earn (/) (1900) 22 All. 307. 

152 



IB THE INDIAN CONTRACT ACT. 

S. 43. remaining unsatisfied against them was a bar to a second suit against other 
joint mortgagors, and the Court held that it did not constitute any bar 
and that a second suit was maintainable, the doctrine of King v. Hoare (ri) 
not being applicable in India, at all events in the Mufassal, since the 
passing of the Indian Contract Act. Strachey, C.J.,said : " My objections 
to the application of the doctrine are based on purely legal grounds. The 
doctrine now rests not so much on King v. Hoare (1844) 13 M. & W. 494, 
as on the judgments of the law lords in Kendall v. Hamilton (1879) 
4 App. Ca. 504. As explained in those judgments, the doctrine that there 
is in the case of a joint contract a single cause of action which can only be 
once sued on is essentially based on the right of joint debtors in England 
to have all their co- contractors joined as defendants in any suit to enforce 
the joint obligation. That right was in England enforceable before the 
Judicature Acts by means of a plea in abatement, and since the Judicature 
Acts by an application for joinder which is determined on the same 
principles as those on which the plea in abatement would formerly have 
been dealt with. In India that right of joint debtors has been expressly 
excluded by s. 43 of the Contract Act, and therefore, the basis of the 
doctrine being absent, the doctrine itself is inapplicable. Cessante ratione 
legis, cessat ipsa lex" 

The reasoning of Strachey, C.J., seems to us conclusive ; but until it 
has been adopted by the other High Courts or confirmed by the Judicial 
. Committee of the Privy Council the point must be regarded as open. 

Coming next to the High Court of Bombay, the doctrine of King v. 
Hoare was assumed to be applicable to India by that Court in Lukmidas 
Khimji v. Piirshotam Haridas (0), and in Laksmishankar v. Vishnuram (p). 
In the latter case it was held that the principle of King v. Hoare did not 
apply to the facts of the case, as the decree in the first suit against one of 
the partners, which was set up as a bar to a subsequent suit against allK 
the partners, was made by the Civil Court of Baroda, which had no 
jurisdiction over some of the partners who resided in British territory. 
The applicability to India of the rule in King v. Hoare was again con- 
sidered by the same Court in Dick v. Dhunji JaittM (q), but the point 
was not decided, as the Court thought it did not arise directly for 
decision. 

Judgment against one joint promisor who admits claim after institu- 
tion of suit does not bar the suit against other joint promisors. In the 
last- mentioned case the plaintiff sued the defendants, alleging that they 

() (1844) 13 M. & W. 494 ; 67 K. K. (p) (1899) 24 Bom. 77. 

694. (0) (1901) 25 Bom. 378. 

00 (1882) 6 Bom. 700. 



JOINT PROMISORS. 229 

were partners, and at the hearing one of the defendants admitted the S. 43. 
plaintiff's claim, and judgment was thereupon passed against him for the 
amount claimed. On behalf of the other defendants it was contended 
that, the cause of action alleged in the plaint being joint, it merged in 
the judgment recovered against the first defendant, and that further 
proceedings in the suit were therefore barred. The Court did not accede 
to this contention, and it was held that the judgment recovered against 
the first defendant did not bar further prosecution of the suit against the 
others. Reference was made in the course of the judgment to s. 153 of 
the Code of Civil Procedure, 1882 (now 0. 15, r. 2, Code of Civil 
Procedure, 1908). As to King v. Hoare, it was stated that the rule there 
laid down did not apply to the facts of the case under consideration. 

Suit against one of several partners. In Lukmidas Khimji v. 
Purshotam Haridas (r) it was held in a suit brought upon a contract 
made by a partnership firm that a plaintiff may select as defendants those 
partners of the firm against whom he wishes to proceed. This decision 
was cited with approval by Farran, C.J., in Molilal Bechardass v. 
Ohellabhai Hariram (s), and was followed by the High Court of Madras 
in Narayana Chetti v. Lakshmana Chetti(t}, where it was held in a similar 
case that according to the law declared in s. 43 of the Contract Act, 
especially when taken with s. 29 of the Code of Civil Procedure (u), it 
is not incumbent on a person dealing with partners to make them all 
defendants, and that he is at liberty to sue any one partner as he may 
choose. It will be noted in this case that the Court expressly applied to 
partners not only s. 43 of the Contract Act, but also s. 29 of the Code of 
Civil Procedure, which relates not to joiut, but to several and to joint 

(r) (1882) 6 Bom. 700. 307, 315. 

, (s) (1892) 17 Bom. 6, 11. In that case (u) S. 29 of the Code of Civil Procedure, 
Farran, C.J., observed that ss. 42, 43, and 1882 (now 0. 1, r. 6, in the Code of 
45 related to partners as well as to other 1908) runs as follows : " The plaintiff may, 
co-contractors, and that if the Legislature at his option, join as parties to the same 
had intended to except partners from the suit all or any of the persons severally or 
provisions of this section it would have jointly and severally liable on any one 
done so in express words. See, however, contract, including parties to bills of ex- 
Lalismislianliar v. Vishnuram (1899) 24 change, hnndis, and promissory notes." 
Bom. 77, where the Court held, without The judgment seems to assume that the 
any reference to the earlier case, that the effect of s. 43 was to make all joint con- 
liability of partners was joint, and that tracts joint and several. See Motilal 
no one partner could change it into a Becliarda&s v. GhellaWtai Ilarlntm 
joint and several liability without the (1892) 17 Bom. G, 11 ; and Muhammad 
consent of the other partners. Askari v. Radlte Ram, Singh (1900) 22 

(0 (1897) 21 Mad. 256. See also (1878) All. 307, 316. 
3 Cal. 353, 359, 360, and (1900) 22 All. 



10 THE INDIAN CONTRACT ACT. 

S. 43. and several, liability. The same view of the section has been taken by the 
Punjab Chief Court (y). 

In this connection may be noted 0. 1, r. 10, of the Code of Civil Proce- 
dure, which provides that the Court may order, either of its own motion or 
on the application of a party to a suit, " that the name of any person who 
ought to have been joined, whether as plaintiff or defendant, or whose 
presence before the Court may be necessary in order to enable the Court 
effectually and completely to adjudicate upon and settle all the questions 
in the suit, be added." The effect of s. 43 being, according to the above 
decisions, to render the liability of joint promisors joint and several and 
to exclude the right of a joint contractor to be sued along with his 
co-contractors, the provisions of 0. 1, r. 6, are applicable to the case, and 
the promisee is at liberty to sue any one or more of the joint promisors. 
But this right is distinct from, and does not affect, the right of a defendant 
to apply to the Court under 0. 1, r. 10, of the Code to have his co- 
contractor added as a party. But such an application, it is conceived, 
can be sustained not on the ground that the joint contractor " ought to 
have been joined " as defendant, but only under the latter branch of the 
section, if the Court considers it necessary to do so (z). 



(/) Jag Lai v. S/tib Lai (1902) Punj. 
Rec. no. 37 ; Thomas Beck v. Thomas 
Slddle (1892) Punj. Kec. no. 11. 

(.r) Note the observations of Strachey, 
C.J., in Muhammad Asltari v. liadfte Ram 
Singh (1900) 22 All. 307, 316, 317 : " In 
their note to s. 43, Messrs. Cunningham 
and Shephard, at pp. 158, 159, of their 
commentary on the Indian Contract Act, 
7th ed., say that, 'if this section is 
intended to deny to joint debtors the 
right to be sued jointly in one suit, it 
involves a departure from English law,' 
and that, ' in view of this section and the 
29th section of the Code of Civil Pro- 
cedure, it is clear that the non-joinder of 
a co-debtor is no ground of defence to a 
suit ; but it is apprehended that an 
application made under the 32nd section of 
the Code to add as a defendant an omitted 
co-debtor would be dealt with in the 
same manner as it is in England.' I 
cannot agree with this view. As the 
judgments in Kendall \. Hamilton, (1879) 
L. R. 4 A. C. 504, show, such an applica- 



tion would in England be dealt with in 
the same manner as the old plea in 
abatement, and the effect of the latest 
decisions is that a joint debtor, though he 
has not an absolute, has an ordinary and 
aprimdfacie, right to have his co-debtors 
joined : Wilson, Sons $ Co. v. Balcarres 
Brook Steamsli'q) Co. [1893] 1 Q. B. 422 ; 
RolinsoH v. Geisel [1894] 2 Q. B. 685." 

Note also the observations of Crowe, J., 
in Dick v. Dhunji Jaltlia (1901) 25 Bom. 
378, 386, where the learned Judge says : 
"With regard to the argument based on 
the provisions of s. 43 of the Contract 
Act, it seems to me that that section 
merely takes away the right of a joint 
debtor to be sued jointly and to plead in 
abatement a right which was abolished in 
England by the Judicature Acts. It is 
still open to a defendant to apply to the 
Court for joinder of a person who ought 
to have been included in the action ; and, 
to use the words of Earl Cairns, L.C., in 
Kendall v. IfumUton (1879) 4 App. Ca. 
504, ' the application to have a person so 



JOINT PROMISORS I CONTRIBUTION. 231 

Contribution between joint promisors. This clause represents the S. 43. 
doctrine of English equity as distinct from that of the Common Law Courts. 
It would be useless to cite English authorities. 

The liability is only to contribute to the performance of the promise. 
Heuce if one of several persons jointly liable for a debt is sued, and is 
compelled to satisfy the debt and the costs of the suit, he can only call on 
the others to contribute in respect of the debt, and not in respect of the 
costs (y). 

When liability to contribute arises. In a case decided before the 
enactment of the Contract Act, it was held that the mere existence of a 
decree against one of several joint debtors does not afford ground for a 
suit for contribution against the other debtors. " Until he has discharged 
that which he says ought to be treated as a common burden, or at any 
rate done something towards the discharge of it, he cannot say that 
there is anything of which he has relieved his co-debtors, and which he 
can call upon them to share with him " (z). And the law under the 
Contract Act would appear to be the same (see illustrations to the 
section). 

Contribution as between judgment debtors. The question as to 
whether, as between persons against whom a joint decree has been passed, 
there is any right of contribution at all depends upon the question whether 
the defendants in the former suit were wrong-doers in the sense that they 
knew or ought to have known that they were doing an illegal or wrongful 
act. In that case no suit for contribution will lie(). Thus where a 
decree for costs against two defendants jointly was executed against one 
of them, who had set up a false defence in the suit in collusion with the 

omitted included as a defendant ought to and to be reasonably inferred from its 

be granted or refused on the same language. 

principles on which a plea in abatement (y) Punjab v. Petum Singh (1874) 6 

would have succeeded or failed.' S. 32 N.-W. P. 192. 

of the Civil Procedure Code gives the (z) Ram Pershad Singh v. Neerbhoy 

Court absolute discretion, either on appli- Singh (1872) 11 B. L. K. 76. 
cation or suo motit, to dismiss or add () Suput Singh v. Imrit Tewari (1880) 

parties." 5 Cal. 720, citing Merryioeather v. Nixan 

The opinion expressed by Mr. Justice C1799) 8 T. R. 186 ; 16 R. R. 810 ; 1 Sm. 

Crowe corresponds to a considerable L. C. 383, 10th ed. (The real leading 

extent with that of Messrs. Cunningham case is, however, Adamsonv. Jan-is (1827) 

and Shephard. We agree with Strachey, 4 Bing. 66, 29 R. R. 503. Bee [1894] 

C.J., in thinking that an application A. C. at p. 324.) Hari Saran Maitra v. 

under 0. 1, r. 10, to add as defen- Jotindra Mohan Lahiri (1900) 5 C. W.N. 

dant an omitted debtor should not be 393 ; Mohesh Chandra v. Soydya Nath 

dealt with as in England, but on the (1901) 6 C. W. N. 88 ; Krishna Rum v. 

principles expressed in the Contract Act Rakmini Sewak Singh (1887) 9 All. 221. 



232 THE INDIAN CONTRACT ACT. 

Ss, 43, 44. other, and the former sued the latter for contribution, it was held that the 
suit would not lie(J). In a recent case(e) the High Court of Madras 
considered it an open question how far the rule in Merry iv father v. 
Nixan (cl), which lays down that there is no contribution between joint 
tortfeasors, was applicable to India, having regard to the observations of 
Lord Herschell in Palmer v. Wick, etc., Steam Shipping Co. (e), where the 
noble lord said that the rule did not appear to him " to be founded on 
any principle of justice or equity or even of public policy which justifies 
its extension to the jurisprudence of other countries." 

44, Where two or more persons have made a joint 
promise, a release of one of such joint 

Effect of release J . 

of one joint pro- promisors by the promisee does not dis- 

misor. . . . . . 

charge the other joint promisor or joint pro- 
misors ; neither does it free the joint promisor so released 
from responsibility to the other joint promisor or joint 
promisors. 

"We have here another variation of English law. In England the 
releasing creditor must expressly reserve his rights against the co-debtors 
if he wishes to preserve them (/ ). 

This section applies equally to a release given before or after breach. 
Thus where in a suit ( g ) f or damages against several partners the plaintiff 
compromised the suit with one of them, and undertook to withdraw the suit 
as against him, it was held that the release did not discharge the other 
partners, and the suit might proceed as against them. For the latter it 
was contended that the section occurred in the portion of the Act relating 
to the performance of contracts, and that it did not therefore apply to 



(i) Vayangara v. Parly angot (1883) 7 the rest. 

Mad. 89; Sndhu Singh v. Lehna Singh (c) Siva Panda v. Jujtusti Panda (1Q02) 

(1901) Punj. Rec. no. 7 ; GoUnd Cylinder 25 Mad. 599. 
v. Srigo-Und (1897) 24 Cal. 330. See also (rf) See note (a), above, 
as to contribution between judgment (e) [1894] A. C. 318, 324. 
debtors Brqjendro Kumar Roy v. Jfaafi (/) There is no different equitable 

Seharl Roy (1886) 13 Cal. 300, and doctrine. In Ex parts Good, (1877)5 Ch. 

LaTtshmana Ayyan v. Rangasami Ayyan Div. 46, the document in question was 

(1894) 17 Mad. 78, where it was held upon held not to be a release at all, and the 

the facts of the case that one judgment general rule not disputed ; see at p. 57. 
debtor against whom execution had been (0) -K'irfee Cltunder v. Struthers (1878) 

levied was entitled to contribution against 4 Cal. 336. 



JOINT PROMISEES. 233 

liabilities arising out of the breach of a contract. The Court held that S. 45. 
such a construction of the section was too narrow. 

45. When a person has made a promise to two or 
Devolution of rnore persons jointly, then, unless a contrary 
joint rights. intention appears from the contract, the right 

to claim performance rests, as between him and them, with 
them during their joint lives, and, after the death of any of 
them, with the representative of such deceased person jointly 
with the survivor or survivors, and, after the death of the 
last survivor, with the representatives of all jointly. 

Illustration. 

A., in consideration of c,000 rupees lent to him by B. and 0., 
promises B. and C. jointly to repay them that sum with interest on a 
day specified. B. dies. The right to claim performance rests with 
B.'s representative jointly with C. during C.'s life, and after the death 
of C. with the representatives of B. and 0. jointly. 



Promise to two or more persons jointly. This section applies to all 
joint promisees whether- they be partners (A), co-sharers (*'), or members of 
a joint Hindu family carrying on business in partnership (K). There is 
nothing in this enactment to show what happens to a single right when 
the owner of it dies, and several persons become entitled to it (I). In 
such a case, it has been held that all of them must join in a suit to enforce 
the right, and if any of them refuses to join as plaintiff, he must be added 
as a defendant (m). 

Right to performance of promises during joint lives. As the 
right to claim performance of a promise in the case of joint promisees 
rests with them all during their joint lives, it follows that all the 
joint promisees should sue upon the promise (ri). If a suit is, therefore, 



(/<) Motilal v. Gliellabliai (1892) 17 (1894) 18 Mad. 33. 

Bom. 6, 13 ; Ago, Gulam Ilusain \. A. D. (I) Kandhiija Lai \. Chaiular (1884) 

Sasoon (1897) 21 Bom. 412, 421. 7 All. 313, 322. 

(i) Ballirislma v. The Municipality of (t) Ib. ; Ahinsa Hibl v. AM id Kader 

MaJiad (1885) 10 Bom. 32 ; Bamltriskna (1902) 25 Mad. 26, 35 ; Mahamed Ishaq 

v. Eamabai (1892) 17 Bom. 29. v. Sheikh Akramul Jfioj (1908) 12 

(k) Ilamxelult v. Ramlatt Komidoo C. W. N. 84, 86, 93. 

(1881) 6 Cal. 815; Kali&as v. Nathu (n) Dular Chanel v.Balram Das (1877) 

Mat/van (1883) 7 Bom. 217 ; Ram. 1 All. 453 ; Jowala Nath v. Rupa (1882) 

Naraln v. Ham, Cliunder (1890) 18 Cal. Puuj. Rec. no. 175. But if a contract is 

86 ; Alagappa Chetti v. VelUan Chetti entered into with one partner only it is 



234 THE INDIAN CONTRACT ACT. 

S. 45. brought by some of them only, and the other promisees are subse- 
quently added as plaintiffs, whether on objection taken by the defen- 
dant (0) or by the Court of its own motion (p), the whole suit will be 
dismissed if it is at that time barred by limitation as regards the other 
promisees. 

In this connection we may note the provisions of the Code of Civil 
Procedure, 1908, 0. 30, r. 4, which are as follows : 

" (1) Notwithstanding anything contained in section 45 of the 
Indian Contract Act, 1872, where two or more persons may sue or be 
sued in the name of a firm under the foregoing provisions and any of such 
persons dies, whether before the institution or during the pendency of any 
suit, it shall not be necessary to join the legal representative of the 
deceased as a party to the suit. 

" (2) Nothing in sub-rule (1) shall limit or otherwise affect any 
right which the legal representative of the deceased may have (a) to 
apply to be made a party to the suit, or (b) to enforce any claim against 
the survivor or survivors." 

Validity of discharge by one of several joint promisees. It has 
been held by the Madras High Court that this section does not make it 
incumbent on the debtor to satisfy all the joint promisees before obtaining 
a complete discharge. A release, therefore, of a mortgagor by one of two 
mortgagees on payment to him of the mortgage debt discharges the 
mortgagor from all liability under the mortgage to the other mortgagee (q). 
This decision is based upon the English case of Wallace v. Kelsall (;) and 
the last paragraph of s. 38, which provides that "an offer to one of 
several joint promisees has the same legal consequences as an offer to all 
of them." The authority of this decision is considerably shaken by the 
later decision of the Chancery Division in Poivell v. Brodhurst (s). But 
the principle of the Madras case is inapplicable to the case of co-heirs who 
are not joint promisees, but the heirs of a single promisee, and a release, 
therefore, of the mortgagor by one of the heirs of the deceased mortgagee 
on payment to him of the amount due under the mortgage is not a valid 

competent for him to maintain a suit by (1897) 21 Bom. 580. 

himself without making his partners co- (/;) Imam-vd-din v. Llladliar (1892) 

plaintiffs : Me/it- Slnyh v. Chela Ram 14 All. 524 ; Ram Klnkar v. AMU 

(1906) Punj. Rec. no. 127. See Ahinsa Chandra (19U8) 35 Cal. 519. 

Bill \. Abdul Aflde;- (1902) 25 Mad. 26 ; (if) Barter Maran v. Ramana (1897) 

Imam-ud-Din v. Liladhar (1892) All. 20 Mad. 461. 

W. N. 104. (r) (1840) 7 M. & W. 264 ; 56 R. R. 

(0) RamxebuTtv. Ramlall Kundoo (1881) 707. 

6 Cal. 815; Kalldas v. Nathu Bhagvan (*) [1901] 2 Ch. 160; Ahinsa Bili v. 

(1883) 7 Bom. 217 ; Fatmalal v. Pirlhal Aid id Kader (1901) 25 Mad. 26, 39 ; 



SUIT BY SURVIVING PARTNER. 235 

discharge to the mortgagor (). Where a debt due to a joint Hindu S. 45. 
family stands in the name of one member, he is prima facie entitled to 
realise it, and a payment made to him is a valid discharge of the 
debt (V). The same rule holds even where the debt is family property. 
In such a case a payment made to any other member of the family does 
not operate as a discharge, unless there be circumstances justifying the 
payment (c). 

Suit by a surviving partner. The general rule of English law is 
(contrary to the present section) that joint contracts are enforceable by the 
survivors or survivor alone. There is an equitable exception, founded on 
mercantile custom, as to debts due to partners ; but even in this case, 
" although the right of the deceased partner devolves on his executor, . . . the 
remedy survives to his co-partner, who alone must enforce the right by 
action, and will be liable on recovery to account to the executor or 
administrator for the share of the deceased" (d). The present section 
extends the mercantile rule of substantive right to all cases of joint con- 
tracts. But it does not follow that it was intended to alter the rules of 
procedure in cases where the mercantile rule of substance was already 
admitted. It seems therefore to be the better opinion that the representa- 
tives of a deceased partner are not necessary parties to a suit for the 
recovery of a debt which accrues due to the partnership in the lifetime of 
the deceased (e). It has been so laid down by the High Courts of 
Allahabad, Bombay, and Madras ; but the contrary has been maintained 
by the Calcutta High Court (/). English law and the alteration of 
it by the Act were discussed, and the difficulty occasioned by the 
words " as between him and them " in connection with this point was 
considered by Farran, J., in Motilal v. GhellaWiai (g}. The learned 
Judge there stated, " It is difficult to give these words their full effect 
if the surviving contractors in the case of partners are allowed to sue 
alone. The right to performance of the contract as far as the other 
contracting party is concerned rests just as much with the representative 



Situ rum v. ShridJtar (1903) 27 Bom. (e) GoUnd Prasad v. Cliandar Sekhar 

292, 294. (1887) 9 All. 486 ; Motilal v. GJiellabhai 

(n) Sitai-eint v. SJu -id/tar (1903)27 Horn. (1892) 17 Bom. 6 ; Vaidyanatha Ayi/ar 

292. v. Chintiasami Naik (1893) 17 Mad. 108 ; 

(li) Ramanami Chctti v. Manihlta Debi Das v. Nirpat (1898) 20 All, 365 ; 

Mud ali (1899) 9 Mad. L. J. 155. Mulli Raj v. George Knight (1906) Punj. 

(r) Adaikkalain Chetti v. MariututJtu Rec. no. 10. 

(1899) 22 Mad. 326. (/) Ram Narain v. Ram Chundcr 

(d) Williams on Executors, 10th ed. (1890) 18 Cal. 86. 

(1905), p. 638 ; 9th ed., pp. 733, 734. (3} (1892) 17 Bom. 6, 14. 



236 THE INDIAN CONTRACT ACT. 

S. 45. of the deceased partner as with the surviving partner. Can the latter 
then sue without joining the former as a party to the suit ? Logical 
consistency points to an answer in the negative. The case of partners 
is, however, as we have shown, anomalous, and we think that, as the 
Legislature has not enacted that the representatives of a deceased 
partner must join in suing in a partnership contract jointly with the sur- 
viving partners, we are not wrong in holding that, notwithstanding the 
provisions of the Contract Act, the old practice of the Small Causes Court 
need not be changed." 

The case is not literally covered by s. 263, but it may be held that a 
contrary intention within the meaning of the present section sufficiently 
appears from the nature of the transaction when it is once ascertained to 
be a partnership transaction, regard being had to the uniform and well- 
understood course of practice. 

With regard to the supposed anomaly, it disappears when we remember 
that in mercantile usage the firm is regarded as a person distinct from the 
individual partners so long as the partnership exists and is not fully wound 
up ; and this view is now to a certain extent recognised in English 
procedure by allowing actions to be brought by and against partners in 
the name of the firm (h). Very much the same procedure has been intro- 
duced by the Code of Civil Procedure, 1908 (*). 

In so far as the firm is treated like a person, the executors of a deceased 
partner are no more appropriate parties to the recovery of a partnership 
debt than the executors of a deceased shareholder to the recovery of a debt 
due to an incorporated company. 

Suit by representative of deceased partner. The representative of 
the estate of a deceased partner may maintain a suit for the recovery of a 
partnership debt, and may join the surviving partners as defendants in the 
suit where they refuse to join as plaintiffs (k). 

Right of performance of representative jointly with survivor. 
"Where, by the terms of a mortgage, interest was payable by the mortagor 
to two mortgagees jointly, it was held that upon the death of one of the 
mortgagees his legal representative was entitled to a moiety of the interest 
due under the mortgage (/). 

Survivorship in case of Government securities. The Indian 
Securities Act XIII of 1886, s. f>, runs as follows : 



(A) Order XLVIII. A ; Pollock, Digest Sazoon (1897) 21 Bom. 412, 421. 

of Law of Partnership, 8th ed., p. 139. (I) Kanthu Punja v. Vittamma (1901) 

(0 See Order XXX. 25 Mad. 385. 
(A) Ago, Gvlant Husaln v. A. D. 



TIME FOR PERFORMANCE. 237 

" 1. Notwithstanding anything in the Contract Act, 1872, s. 45, when a Govern- Ss. 45, 46. 
ment security is payable to two or more persons jointly, and either or any of them 
dies, the security shall be payable to the survivor or survivors of those persons. 

" 2. Nothing herein contained shall affect any claim which the representatives of 
the deceased person may have against the survivor or survivors in respect of the 
security jointly payable to him or them and the deceased. 

" 3. This section shall apply whether death of the person to whom the security 
was jointly payable occurred or occurs before or after this Act comes into force." 

Time and Place for Performance. 

46, Where, by the contract, a promisor is to perform 
Time for perform- his promise without application by the 
promisee, and no time for performance is 
specified, the engagement must be performed 
specified. within a reasonable time. 

Explanation. The question "what is a reasonable time " 
is, in each particular case, a question of fact. 

" Engagement." The word "engagement" in this section is a survival 
from the language of the original draft, in which, for some reason not easy 
to understand, it is constantly used instead of " agreement " or " promise." 
Here it is synonymous with "promise." 

Reasonable time. It is also difficult to understand why decisions 
should be reported on the question of what is reasonable time, which is 
declared by the Act itself to be always a question of fact ; but, having 
been reported, they must be mentioned. Where the defendants agreed 
to supply coal to the plaintiffs from time to time, as required by the 
defendants, on reasonable notice given to them, it was held that a notice 
given by the plaintiffs on the 22nd July, 1898, for the supply of 2,648 
tons of coal on or before 31st August, 1898, was not reasonable (m). 
Jenkins, C. J., said : " Perhaps it might have been physically possible for the 
defendants to carry out such an order, but it would clearly have required an 
effort which the plaintiffs had no right to demand. I do not think that a 
notice involving such an effort from business men with innumerable other 
matters to attend to can be held to be such a reasonable notice as was 
intended by both parties when this document was given." And where the 
defendant agreed to discharge a debt due by the plaintiff to a third party 
and in default to pay to the plaintiff such damages as he might sustain, 
and no time was fixed for the performance of the obligation, it was held 

O) The Boigal Coal Co., Ltd. v. Homee Wadia $ Co. (1899) 24 Bom. 97, 104. 



238 THE INDIAN CONTRACT ACT. 

Ss. 46, 47. that the failure of the defendant to perform it for a period of three 
years amounted to a breach of the contract, as that was a sufficient and 
reasonable time for performance (n). 

Compare the Negotiable Instruments Act XXVI of 1881, s. 105, 
which runs as follows : 

"In determining what is a reasonable time for presentment for 
acceptance or payment, for giving notice of dishonour, and for noting, 
regard shall be had to the nature of the instrument and the usual course 
of dealing with respect to similar instruments ; and in calculating such 
time public holidays shall be excluded." 

47 When a promise is to be performed on a certain 
Time and place day, and the promisor has undertaken to per- 
form it; without application by the promisee, 
tne P roimsor ma J perform it at any time 
made - during the usual hours of business on such 

day and at the place at which the promise ought to be 

performed. 

Illustration. 

A. promises to deliver goods at B.'s warehouse on the 1st January. 
On that day A. brings the goods to B.'s warehouse, but after the usual 
hour for closing it, and they are not received. A. has not performed 
his promise. 

Common Law rule. This section, with the illustration, simplifies the 
rule. According to the Common Law as laid down in the only modern case 
on the subject (0), the illustration would have run thus : " B. is not bound 
to be at the warehouse to receive the goods after the usual hours of business, 
and if he is not there A. has not performed his promise. If B. is there 
and could receive the goods before midnight, but refuses to do so, A. has 
performed his promise." There are some further minute distinctions in 
English law which it would be useless to cite here (p). The amendment 
made by this section is obviously in accordance with good sense, though 
the English rule is capable of a logical explanation. 

Delivery on Sunday. In a suit for damages against the defendant, 
a German, for non-delivery of goods, it was contended that he was not 
bound to deliver the goods on Sunday, which was the last day named 
in the contract for performance. It was held that the " Lord's Day 

() Doraxiiiyti v. Aninachalam (1899) Man. & G. 593, 64 E. E. 810. 
23 Mad. 441. O) They are stated in Leake, 6U5 

(o) Startup v. Macdotiald (1843) 6 608. 



PLACE FOR PERFORMANCE. 239 

Act " did not apply to India, at any rate not to the defendant, who was a 7 ~ 49> 
German, and that, in the absence of a custom to the contrary, he was 
bound to deliver the goods on that day if they had not already been 
delivered (#). 

48. When a promise is to be performed on a certain 
day, and the promisor has not undertaken to 

Application for 

performance on perform it without application by the promisee, 

certain day to be at . . . 

proper time and it is the duty of the promisee to apply tor 
performance at a proper place and within the 
usual hours of business. 

Explanation. The question " what is a proper time and 
place " is, in each particular case, a question of fact. 

The proper place will, of course, be the place named in the contract, if 
any. Where more than one place is named, " it is for the person to whom 
payment is to be made to fix the place at which he will be paid ; until he 
has selected the place at which he will be paid there can be no default." 
The English decision from which we quote would presumably be followed 
here (r). 

49, When a promise is to be performed without 
application by the promisee, and no place is 

Place for per- L \ 

formance of pro- fixed for the performance of it, it is the duty 

mise where no 

application to be of the promisor to apply to the promisee to 

made and no place . 

tixed for perform- appoint a reasonable place tor the pertorm- 
ance of the promise, and to perform it at 
such place (s). 

Illustration. 

A. undertakes to deliver a thousand maunds of jute to B. on a 
fixed day. A. must apply to B. to appoint a reasonable place for the 
purpose of receiving it, and must deliver it to him at such place. 



Rule of Common Law. In the Common Law the rule as to money 
payments (which, however, is rendered practically obsolete by the methods 

(q] Lalclutnd Jiiilbixiirni- v. John L. (.v) Qu. whether failure to perform this 

Kcrxfni (1890) 15 Bom. 338. preliminary duty amounts to a breach of 

(>) Thorn v. City Rice Mills (1889) 40 the whole contract. See Armltage v. 

Ch. D. 357, 360. Insole (1850) 80 R. R. 388, 14 Q. B. 728. 



240 THE INDIAN CONTRACT ACT. 

8, 49. of modern business) is that, if no place is named, the debtor is bound to 
find the creditor, provided he is within the jurisdiction (/) ; but if the 
obligation is to deliver heavy or bulky goods he must procure the creditor 
to appoint a place to receive them. " And so note a diversitie between 
money and things ponderous, or of great weight " (u). The present section 
lays down a reasonable rule for all cases without distinction (v). The late 
Tyabji, J., seems to have overlooked the present section when he said that 
" where no specific contract exists as to the place where the payment of the 
debt is to be made, it is clear that it is the duty of the debtor to make the 
payment where the creditor is " (x). 

Place of delivery. Where by an agreement for the sale of goods it 
was stipulated that the goods were " to be delivered at any place in Bengal 
in March and April, 1891," and it was added, " the place of delivery to be 
mentioned hereafter," it was held by the Judicial Committee that the buyer 
had the right to fix the place, subject only to the express contract that it 
must be in Bengal and to the implied one that it must be reasonable. The 
use of the words " place of delivery to be mentioned hereafter " did not 
take away that right, nor did they leave the question of the place of 
delivery to be settled by a subsequent agreement. If the latter had been 
meant, the expression used would have been "agreed on" instead of 
" mentioned." It was also held that such a contract does not fall within 
s. 94 of the Act, but rather resembles what is contemplated in the present 
section (y). 

"Without application by the promisee." This section does not apply 
to cases where money is made payable on demand by the promisee : Raman 
Chettiyar v. Gopalachari (1908) 31 Mad. 223, at p. 228. 

Place of performance in pakki adat contracts. In the case of 
pakki adat agency the place of payment is the place where the constituent 
resides, unless he has chosen to fix another place by express direction (2). 



(f) See Haldane v. Johnson (1853) 8 (r) As to delivery of goods sold see 

Ex. 689, 91 R. R. 705 ; Kedarmal ss. 93, 94. 

Bhuramal v. Surajmal Oovindram (1907) (x) JUotilalv. Surajmal (1906) 30 Bom. 

9 Bom. L. R. 903, at p. 911 ; Puttappa 167, at p. 171. 

Manjayav. Virabltadrappa (1905) 7Bom > (y~) Grenon v. Lachml Nara'm Augur- 

L. R. 993. icala (1896) 24 Cal. 8,23 L. R. Ind. Ap. 119. 

() Co. Lit. 210 b. The danger of (;) Kedarmal v. Surajmal (1908) 10 

travelling about England with any con- Bom. L. R. 1230. As to the incidents 

siderable sum of money, which was serious of pakki adat in general, see Kanji v. 

in Littleton's time and appreciable in Bhagwandas (1905) 7 Bom. L. R. 57, 

Coke's, does not seem to have been at p. 65, and s. c. on app. sub now. 

thought of as an objection. But archaic Bhagwandas v. Kanji (1906) 30 Bom. 

law rarely favours debtors. 205. 



PERFORMANCE OF MUTUAL PROMISES. 241 

Performance in >0. The performance of any promise Ss. 50, 51. 

pi^rTbecioJslnc 6 - ma J be &* in any manner, or at any time 
tioned by promisee. w hi c h ^he promisee prescribes or sanctions. 



Illustrations, 

(a) B. owes A. 2,000 rupees. A. desires B. to pay the amount to 
A.'s account with 0., a banker. B., who also banks with 0., orders 
the amount to be transferred from his account to A.'s credit, and this 
is done by 0. Afterwards, and before A. knows of the transfer, 0. 
fails. There has been a good payment by B. 

(b) A. and B. are mutually indebted. A. and B. settle an account 
by setting off one item against another, and B. pays A. the balance 
found to be due from him upon such settlement. This amounts to a 
payment by A. and B., respectively, of the sums which they owed to 
each other. 

(c) A. owes B. 2,000 rupees. B. accepts some of A.'s goods in 
reduction of the debt. The delivery of the goods operates as a part 
payment. 

(d) A. desires B., who owes him Es. 100, to send him a note for 
Es. 100 by post. The debt is discharged as soon as B. puts into the 
post a letter containing the note duly addressed to A. 



This rule is elementary. It may be doubted whether illustration (c) 
does not rathw belong to s. 63, but no practical difficulty can arise. The 
facts of illustration (d) must not be confused with those which have given 
rise to troublesome questions in cases of contracts by correspondence (ss. 4 
and 5, p. 29 sqq. above). Here a complete contract is assumed to exist. 
It is hardly needful to add that where the request is to send not legal 
currency, but a cheque or othfcr negotiable instrument, this does not imply 
any variation of the rule that payment by a negotiable instrument is con- 
ditional on its being honoured on presentation within due time (a). 

Payment to an agent, who to the debtor's knowledge had no authority 
to receive the payment, does not discharge the debtor (V). 

Performance of Reciprocal Promises. 

51. When a contract consists of reciprocal promises to 
be simultaneously performed, no promisor 

Promisor not , . . 

bound to perform, need perform his promise unless the promisee 

unless reciprocal . 

promisee ready and IS ready and Willing to perform hlS red- 
willing to perform. 

procal promise. 

(fi) See Kedarmal v. Surajmal (1907) (&) Mackenzie v. Sh'ib Chunder Seal 
9 Bom. L. R. 903, at p. 911. (1874) 12 B. L. R. 360. 

1.0. 16 



[2 THE INDIAN CONTRACT ACT. 

S. 51. Illustrations. 

(a) A. and B. contract that A. shall deliver goods to B. to be paid 
for by B. on delivery. 

A. need not deliver the goods unless B. is ready and willing to pay 
for the goods on delivery. 

B. need not pay for the goods unless A. is ready and willing to 
deliver them on payment. 

(b) A. and B. contract that A. shall deliver goods to B. at a price 
to be paid by instalments, the first instalment to be paid on delivery. 

A. need not deliver, unless B. is ready and willing to pay the first 
instalment on delivery. 

B. need not pay the first instalment, unless A. is ready and willing 
to deliver the goods on payment of the first instalment. 



Simultaneous performance. This section expresses the settled rule of 
the Common Law. To understand the principle rightly, we must remember 
that in a contract by mutual promises the promises on either side are the 
consideration, and the only consideration, for one another. But the terms 
of a promise may express or imply conditions of many kinds ; and the 
other party's performance of the reciprocal promise, or at least readiness 
and willingness to perform it, may be a condition. It is obviously 
immaterial whether it is called a condition or not, if in substance it has 
that effect. To say " I will pay when you deliver the goods " is 
more courteous than to say " If you do not deliver the goods in a reason- 
able time you will not be paid " ; but " when " implies " if," and the 
result is the same. And if it appears on the whole from the terms or 
the nature of the contract that performance on both sides was to be 
simultaneous, the law will attach such a condition to each promise, with 
the operation laid down in the present section. 

Performance of one party's promise may have to be completed or 
tendered before he can sue on the other's reciprocal promise. In that case 
it is said to be a condition precedent to the right of action on the reciprocal 
promise. 

Where the performances are intended to be simultaneous, as supposed 
in this section (goods to be delivered in exchange for cash or bills, and the 
like), they are said to be concurrent conditions, and the promises to be 
dependent. Observe that " concurrent conditions are only a modified form 
of conditions precedent " (c). 

Promises which can be enforced without showing performance of the 
plaintiff's own promise, or readiness or willingness to perform it, are said 
to be independent. 

. (c) Langdell, Summary, 32. 



SIMULTANEOUS PERFORMANCE. 243 

It is doubtful whether these terms are of much or any real use. " The S. 51. 
real question, apart from all technical expressions, is what in each instance 
is the substance of the contract " (d). But the terras cannot be said to 
be wholly obsolete, and acquaintance with them is necessary for the 
understanding of the English decisions. 

In order to apply the rule of this section we must know whether 
the promises are or are not " to be simultaneously performed." This is 
a question of construction, depending on the intention of the parties 
collected from the agreement as a whole. Before Lord Mansfield's time 
the Courts inclined to hold every promise or covenant complete in itself 
and independent (e~), but there has been no such presumption for more 
than a century. 

In 1773 Lord Mansfield said that " the dependence or independence 
of covenants was to be collected from the evident sense and meaning of 
the parties " (/), and similarly Lord Kenyon in 1797 : " Whether cove- 
nants be or be not independent of each other must depend on the good 
sense of the case, and on the order in which the several things are to be 
done"(<7). 

There is a distinct question from that of " condition precedent," 
namely, whether failure to perform some part of a contract deprives the 
party in fault of any right to remuneration for that which he has performed, 
and entitles t^e other to put an end to the contract, or is only a partial 
breach which leaves the contract as a whole still capable of performance. 
In dealing with cases of this kind it may be very difficult to ascertain the 
true intention of the parties. We have to "see whether the particular 
stipulation goes to the root of the matter, so that a failure to perform it ' 
would render the performance of the rest of the contract by the plaintiff a 
thing different in substance from what the defendant has stipulated for, or | 
whether it merely partially affects it and may be compensated in damages " (h). 
Illustration (b) suggests, though it does not actually raise or decide, a point 
which has given much trouble, and is not settled either by any of the 
general provisions of the Act, or by any disposition of the chapter on the 
Sale of Goods. If A. fails to deliver the first instalment of the goods, or 
delivers a short quantity, may B. put an end to the contract ? The better 
opinion, supported by decisions of the Court of Appeal in England and of 

(d) Per Martin, B., Bradford v. 735, 736. 

Williams (1872) L. R. 7 Ex. at p. 261. (g) Morton v. Lamb, 7 T. R. 125, 4 

(e) For the history of the change see R. R. 395, Finch, at p. 741. 

Langdell, Summary, 139-143. (h) Per Cur., Bettini v. Gye (1876) 1 

(/) Kingston v. Preaton, cited in Jones Q. B. D. 183. 
v. Barkley, Doug. 659, Finch, Sel. Ca. 

162 



THE INDIAN CONTRACT ACT. 



the Supreme Court of the United States (i), is that, in the absence of any 
specific indication of a contrary intention, he may. But there are also 
decisions difficult to reconcile with this view (&). The Sale of Goods Act, 
1893, s. 31, has purposely left the point open as "in each case depending 
on the terms of the contract and the circumstances of the case." 

It seems difficult at this day (except as to the unsettled question last 
mentioned, which is confined to the sale of goods by instalments) to add 
anything in principle to the modern rule ; and Indian decisions are, as might 
be expected, merely illustrative. 

A contract for the sale of shares in a company to be transferred into 
the name of the purchaser upon payment of the price by him on or before 
a certain day falls within this section, so that transfer of the shares and 
payment of the purchase-money should be concurrent acts (/). 

Waiver of performance. The section does not, of course, give any 
remedy to a party who has chosen to perform his part without insisting on 
the reciprocal performance which was intended to be simultaneous with 
his own, as where a seller of goods " for cash on delivery " chooses to deliver 
the goods without receiving the price (m). 

Readiness and willingness. In the case of a contract for the sale of 
shares in a company it is not necessary, in order to prove that a vendor 
was ready and willing to perform his part of the agreement, that he should 
be the beneficial owner of the shares, or that he should tender to the pur- 
chaser the final documents of title to the shares. It is enough that he 
should be able and willing to constitute the purchaser the legal owner of 
the shares agreed to be sold. Thus where the vendor tendered to the 
purchaser share allotment and receipt papers, and together with each a 
transfer paper and an application paper, both signed in blank by the 
original allottee, it was held that the vendor was ready and willing to 
perform his promise (ri). But where neither the transfer nor the form of 



(i) Honcli v. Midler (1881) 7 Q. B. Div. 
92; Norrington v. Wright (1885) 115 
U. S. 189. 

(Jt) Simpson v. Orippin (1872) L. R. 8 
Q. B. 14 ; Freeth v. Burr (1874) L. R. 9 
C. P. 208, which decides only that failure 
in payment for one instalment is not a 
repudiation of the whole contract, and to 
that extent is confirmed by The Mersey 
Steel and Iron Co.'s Case (1884) 9 App. 
Ca. 434 ; see p. 217, above. 

(T) Imperial S a liking and Trading Co. 
v. At in arum Madharji (1865) 2 B. H. C. 
246 ; Imperial Banking and Trading Co. 



v. Pranjivandas Harjimndas (1866) 2 
B. H. C. 258. 

(m) Sooltan Chund v. Schiller (1878) 4 
Cal. 252. The case turned really on s. 39 
(see pp. 216, 218, above), and it was not 
seriously arguable that s. 51 had anything 
to do with it. 

() Imperial Banking and Trading Co. 
v. Atmarain Madhavji (1865)2 B. H. C. 
246. See also Parbhudas Pranjirandas 
v. Ramlal Bhagirath (1866) 3 B. H. C. 69, 
where " share receipts " with applications 
for transfer were tendered to the pur- 
chaser. 



READINESS AND WILLINGNESS. 



245 



application for transfer was offered to the purchaser, nor had the vendor 
any such documents signed by the original allottee in his possession, it was 
held that the vendor could not be said to be ready and willing to perform 
his promise, as the allottee had it in his power to decline to complete the 
contract until he had executed the transfer and the application papers (0). 
Further, it is not necessary to prove readiness and willingness that the 
vendor should have made an actual tender to the purchaser of the transfer 
deed (p). Nor is it necessary that the vendor should have the shares in his 
possession continuously from the date of the contract down to the time of 
performance. If a party bound to do an act upon request is ready to do 
it when it is required he will fully perform his part of the contract, although 
he might happen not to have been ready had he been called upon at some 
anterior period ((?). But where the purchaser before the day fixed for 
delivery gives notice to the vendor that he will not accept the shares, the 
vendor is exonerated from giving proof of his readiness and willingness 
to deliver the shares (r). And where the vendor of goods repudiates the 
contract on being called upon for delivery it is enough for the purchaser 
to prove that he was ready and willing to carry out his part of the bargain, 
and had made preparations with the object of having the money ready in 
hand to pay for the goods on delivery. This section does not require him 
to show that he made an actual tender of the money (s). 

Where g*>ods are sold for "cash on delivery," and the vendor delivers 
a portion of the goods, and the purchaser offers to pay the price thereof 
if certain cross-claims set up by him are adjusted, it cannot be said that 
he is not ready and willing to perform his promise, so as to entitle the 
vendor to refuse delivery of the remaining goods (f). 

Averment of performance. According to the common law rules of 
pleading, where a contract consists of reciprocal promises to be simul- 
taneously performed, neither party to the contract can maintain an action 
without averring a performance, or an offer to perform, on his own part (u) ; 
but the necessity for such specific averment has been abolished in England 
for more than half a century, and now no averment at all of the perform- 
ance of conditions precedent is required in the first instance in either 



S. 51. 



(V) Jit-raj Merjji v. Pmilton (1865) 2 
B. H. C. 253. 

(/;) Imperial Banking and Trading Co, 
v. Pranjivandas Harjivandas (1865) 2 
B. H. C. 258. 

(<y) Jirraj Megji v. Poulton (1865) 2 
B. H. C. 253, 256 ; Maganbhai Hemchand 
v. MancliliMbhai Kalliancliand (1866) 3 



B. H. C. 79, 86. 

(f) Dayabhai Dipcltand v. ManiMal 
Vrijbhuhan (1871) 8 B. H. C. A. C. 123. 

(*) Shriram v. Madangopal (1903) 30 
Cal. 865. 

(0 Sooltan Chund v. Schiller (1878) 4 
Cal. 255. 

() 2 Smith L. C. 15. 



246 THE INDIAN CONTRACT ACT. 

Ss. 5153. England (x) or India. The English rule of practice has been reproduced 
here in the Code of Civil Procedure, 1908 (y). 

52. Where the order in which reciprocal promises are 
to be performed is expressly fixed by the 
contract, they shall be performed in that 
order ; and, where the order is not expressly 
fixed by the contract, they shall be performed in that order 
which the nature of the transaction requires. 

Illustrations. 

(a) A. and B. contract that A. shall build a house for B. at a fixed 
price. A.'s promise to build the house must be performed before B.'s 
promise to pay for it. 

(b) A. and B. contract that A. shall make over his stock in trade 
B. at a fixed price, and B. promises tc give security for the payment 

of the money. A.'s promise need not be performed until the security 
is given, for the nature of the transaction requires that A. should have 
security before he delivers up his stock. 



This section is founded on the same English authorities as s. 51, and on 
similar reasons, and does not appear to require any further commentary. 

53. When a contract contains reciprocal promises, and 
Liability of party one P ar ty to the contract prevents the other 
rw e h!ch n fon v tr a ct from performing his promise, the contract 
is to take effect, becomes voidable at the option of the party so 
prevented ; and he is entitled to compensation from the other 
party for any loss which he may sustain in consequence of 
the non-performance of the contract. 

Illustration. 

A. and B. contract that B. shall execute certain work for A. for a 
thousand rupees. B. is ready and willing to execute the work accord- 
ingly, but A. prevents him from doing so. The contract is voidable at 
the option of B. ; and, if he elects to rescind it, he is entitled to 
recover from A. compensation for any loss which he has incurred by 
its non -performance. 

() R. S. C., Order XIX. r. H, 2 Sm. ness : Rawson v. Johnson (1801) 1 East, 
L. C. 16. Under the old rule it was enough 203, 6 R. B. 252. 
to aver substantial readiness and willing- (y) See Order VI., r. 6. 



IMPOSSIBILITY CREATED BY ACT OF PARTY. 247 

Impossibility created by act of party. This is in substance the rule S. 53. 
not only of the Common Law, but of all civilized law (z). No man can 
complain of another's failure to do something which he has himself made 
impossible. The principle is not confined to acts of direct or forcible 
prevention, which are neither frequent nor probable, but extends to default 
or neglect in doing or providing anything which a party ought under the 
contract to do or provide, and without which the other party cannot per- 
form his part. A man agrees to sell standing wood ; the seller is to cut 
and cord it, and the buyer to take it away and pay for it. The seller 
cords only a very small part of the wood, and neglects to cord the rest ; 
the buyer may determine the contract and recover back any money he has 
paid on account. 

" This was an entire contract ; and as by the defendant's default the 
plaintiffs could not perform what they had undertaken to do, they had a 
right to put an end to the whole contract and recover back the money 
that they had paid under it ; they were not bound to take a part of the 
wood only " (a). 

If the prevention by default goes only to one particular term or 
condition of the contract, the party so prevented from fulfilling that term 
or condition is entitled to treat it as fulfilled, and insist on payment or 
other reciprocal performance accordingly ; or if there was an agreed 
penalty in the contract for non-fulfilment, or an option to rescind the 
contract, the other party cannot take advantage of it. Especially this 
is the case with stipulations as to the time of completion. " If the party 
be prevented, by the refusal of the other contracting party, from com- 
pleting the contract within the time limited, he. is not liable in law for 
the default " (b). 

A railway contractor ordered a steam excavating machine, to be 
capable of digging a certain quantity of material in a working day, and it 
was agreed that he was to be bound to accept it only if it performed this 
on a fair trial at the place where it was to be used. After a partial trial 
the contractor said the machine had failed, and refused to accept or pay 
for it. The maker contended that the contractor had himself failed "to 
provide the conditions for a fair trial. This view of the facts was adopted 
by the Court, and both the Court below and the House of Lords held, as a 
consequence in law, that the bujer, having by his own fault prevented the 

(z) See the rule applied in Mackay v. (V) Roberts v. Bury Commissioners 

Dick (1881) 6 App. Ca. 251, by the House (1869) L. R. 5 C. P. 310, 329 ; Holme v. 

of Lords on an appeal from Scotland. Guppy (1838) 3 M. & W. 387, 49 R. R. 

(a) Giles v. Edwards (1797) 7 T. R, 181, 647 ; see per Parke, B., at p. 649. 
4 R. R. 414. 



248 THE INDIAN CONTRACT ACT. 

Ss. 58, 54. application of the test agreed upon, must accept and pay for the machine 
as if the test had been satisfied. As to the original duty of the buyer to 
secure the conditions for a fair trial, Lord Blackburn laid down this 
general rule : 

"Where in a written contract it appears that both parties have agreed 
that something shall be done which cannot effectually be done unless both 
concur in doing it, the construction of the contract is that each agrees to do 
all that is necessary to be done on his part for the carrying out of that 
thing, though there may be no express words to that effect. "What is the 
part of each must depend on circumstances " (c). 

54. When a contract consists of reciprocal promises, 
such that one of them cannot be performed, or 

Effect of default . i -i 

as to that promise that its performance cannot be claimed till the 

which should be . 

first performed, in other has been performed, and the promisor of 

contract consisting ... . , ., . . 

of reciprocal pro- the promise last mentioned tails to perform it, 
such promisor cannot claim the performance of 
the reciprocal promise, and must make compensation to the 
other party to the contract for any loss which such other 
party may sustain by the non -performance of the contract. 

Illustrations. 

(a) A. hires B.'s ship to take in and convey from Calcutta to the 
Mauritius a cargo to be provided by A., B. receiving a certain freight for 
its conveyance. A. does not provide any cargo for the ship. A. cannot 
claim the performance of B.'s promise, and must make compensation to 
B. for the loss which B. sustains by the non-performance of the contract. 

(b) A. contracts with B. to execute certain builders^ work for a 
fixed price, B. supplying the scaffolding and timber necessary for the 
work. B. refuses to furnish any scaffolding or timber, and the work 
cannot be executed. A. need not execute the work, and B. is 
bound to make compensation to A. for any loss caused to him by the 
non-performance of the contract. 

(c) A. contracts with B. to deliver to him, at a specified price, 
certain merchandise on board a ship which, cannot arrive for a month, 
and B. engages to pay for the merchandise within a week from the 
date of the contract. B. does not pay within the week. A.'s promise 
to deliver need not be performed, and B. must make compensation. 

(d) A. promises B. to sell him one hundred bales of merchandise, 
to be delivered next day, and B. promises A. to pay for them within 
a month. A. does not deliver according to his promise. B.'s promise 
to pay need not be performed, and A. must make compensation. 

(c) Macltay v. Dick (1881) 6 App. Ca. 251, 263. 



DEFAULT OF PROMISOR IN FIRST PERFORMANCE. 



Default of promisor in first performance. This section completes the 
declaration of the principles explained under P. 51 . Jn practice the difficulty 
is to know whether the promises in the case in hand are or are not "such 
that one of them cannot be performed," etc. One way in which the test is 
expressed in English authorities is that, if a plaintiff has himself broken 
some duty under the contract, and his default is such that it goes to the 
whole of the consideration for the promise sued upon, it is a bar to his 
suit ; but if it amounts only to a partial failure of that consideration, it 
is a matter for compensation by a cross-claim for damages (d). 

Where a contract between a shipowner and a charterer was contained 
in the following words, " Hooper s. to arrive after completion of two 
country voyages for London on notice in May or June," and the shipowner 
gave notice after the vessel had completed one voyage only, and the 
charterer refused to ship the goods, it was held, in a suit by the shipowner 
for damages for breach of the contract, that the defendant was under the 
circumstances justified in refusing to perform his promise (e). Garth, C.J., 
put the decision on the ground that the clause " after completion of two 
country voyages " was used to indicate to the charterer the time when the 
ship would be ready, and that it was as essential a part of the_cpnti'act as 
any other more direct stipulation as to time (/). Markby, J., however, 
based his judgment on' the fact that this clause constituted a material part 
of the description of the vessel, and that the ship offered not having com- 
pleted two country voyages, but only one such voyage, did not answer the 
description in the contract (#). From either point of view the above clause 
formed a condition precedent to the performance of the contract by the 
shipowner, and the case would thus seem to fall under this section, though 
there is no reference to it in the judgments. Where the condition relates 
to a supposed existing state of facts, as in Behn v. Burness (]i\ it is not so 
easy to find the most appropriate section of the Act ; but the words of s. 18, 
sub-s. (3), appear sufficient to cover such a case. In Simson v. Virayya (i) 
the defendant agreed to sell to the plaintiffs 5,000 bags of gingelly seed to 
be delivered within a specified time. Two-thirds of the price was paid in 
advance, and it was stipulated that the defendant should give notice to the 
plaintiffs as instalments of 1,000 bags were ready for delivery, and that the 

(d) See the observations of the Judicial 3 B. & S. 751, where the description of a 



Committee in Oxford v. Provand (1868) 
L. R. 2 P. C. 135, 156. 

(e) Fleming v. Koegler (1878) 4 Cal. 
237. 

(/) 4 Cal. p. 247. 

(g) Ib. p. 251. From this point of view 
the case was like Belin v. Burness (1863) 



ship in a charter-party as "now in the 
port of Amsterdam " was held to be "a 
substantive part of the contract " amount- 
ing to a condition. 

(A) See note (</';. 

(0 (1886) 9 Mad. 359. 



250 THE INDIAN CONTRACT ACT. 

Ss. 54, 55. plaintiffs should pay the balance of proportionate price on each instalment 
when ready for delivery. No delivery was made within the stipulated time, 
and after the expiration of that period the defendant delivered 3,000 bags 
to the plaintiffs. The plaintiffs did not pay the proportionate price on 
those bags when ready for delivery, though required by the defendant, and 
the defendant thereupon rescinded the contract, and declined to deliver the 
remaining bags. In a suit for damages by the plaintiffs for non-delivery, 
the Court held, following Freeth v. Burr (k), and distinguishing Withers v. 
Reynolds (T), that the contract was an entire one, and that, the payment by 
the plaintiffs not being a condition precedent to the preparation of the 
remainder for delivery, the defendant was not justified in rescinding the 
contract. See the commentary on s. 51, p. 242, above. 

55. When a party to a contract promises to do a 
certain thing at or before a specified time, or 

Effect of failure . . 

to perform at fixed certain things at or before specified times, and 

time, in contract in i ii i j? ii 

which time is tails to do any such thing at or berore the 

specified time, the contract, or so much of it 

as has not been performed, becomes voidable at the option of 



the promisee, if the intention of the parties was that time 
should be of the essence of the contract. 

If it was not the intention of the parties that time 
should be of the essence of the contract, the 

Effect of such 

failure when time contract does not become voidable by the 
failure to do such thing at or before the 
specified time ; but the promisee is entitled to compensation 
from the promisor for any loss occasioned to him by such 
failure. 

If, in case of a contract voidable on account of the 
Effect of accept- promisor's failure to perform his promise at 

art^e P o e therThan e tne time agreed, the promisee accepts perform- 
that agreed upon. ance Qf guch prom i se at any t i me Q fa^ than 

that agreed, the promisee cannot claim compensation for any 
loss occasioned by the non-performance of the promise at the 
time agreed, unless, at the time of such acceptance, he gives 
notice to the promisor of his intention to do so. 

(k) L. R. 9 C. P. 208. (1) (1831) 2 B, & Ad. 882 ; 36 B. K. 782. 



TIME WHEN OF ESSENCE OF CONTRACT. 



251 



Time when of essence of contract. In England accidental delays 
in the completion of contracts for the sale of land within the time named 
are frequent by reason of unexpected difficulties in verifying the seller's 
title under the very peculiar system of English real property law. Sharp 
practice would be unduly favoured by strict enforcement of clauses limiting 
the time of completion, and accordingly Courts of Equity have introduced i 
a presumption, chiefly, if not wholly, applied in cases between vendors , 
and purchasers of land, that time is not of the essence of the contract. 
But this presumption will give way to proof of a contrary intention by 
express words or by the nature of the transaction ; and in mercantile con- 
tracts, in particular, there is no place for any such presumption (m). The 
Supreme Court of the United States has laid it down broadly that "in the 
contracts of merchants time is of the essence " (n). This is especially so as f 
to shipping contracts. As to the sale of goods, " unless a different intention 
appears by the contract, stipulations as to time of payment are not deemed 
to be of the essence of a contract of sale. Whether any other stipulation 
as to time is of the essence of the contract or not depends on the terms of 
the contract " (o). Generally it is to be observed that in modern business 
documents men of business are taken to mean exactly what they say. 
" Merchants are not in the habit of placing upon t.hftir c.op tracts stipulations 
to_whjcE" they do not 'attach some value and importance " (v\ Parties to 
mercantile contracts, therefore, cannot rely upon the present section to save 
them from the consequences of unpunctuality. 

The language of the section expresses the result of the English 
authorities, though there is perhaps no decision precisely equivalent to the 
third paragraph (q). 

Either party's general right to have the contract performed within a 
reasonable time according to the circumstances is of course unaffected by 
the fact of a literal stipulation as to time not being of the essence. Also 
parties may bind themselves to use special diligence in completion, without 
naming any particular date, for example, by the words "as soon as 
possible," which means within a reasonable time, with an undertaking to 
do the thing in the shortest practicable time, according to the usual course of 
properly conducted business (r). 

The section applies to all cases of reciprocal promises, including con- 
tracts for the sale of goods whether the property in the goods sold has or 

(m) Renter v. Sala (1879) 4 C. P. Div. (1877) 2 App. Ca. at p. 463. 



S. 55. 



239, 249, per Cotton, L.J. 

(n) Norrington v. Wright (1885) 115 
U. S. 189. 

(o) Sale of Goods Act, 1893, s. 10. 



Wi-bb v. Hughes (1870) L. K. 10 
Eq. 281, is the nearest we have been able 
to find. 

(/) Hydraulic Engineering Co. v. 



(p) Lord Cairns in Bowes v. Shand McIIaffie (1878) 4 Q. B. Div. 670, 673. 



252 THE INDIAN CONTRACT ACT. 

Ss. 55, 56. has not passed to the purchaser. Thus in a Calcutta case (s) where time 
was of the essence of the contract, and the vendor rescinded the contract, 
it was contended for the buyer that, the property in the goods sold having 
passed to him, this section did not apply, and the vendor was not entitled 
to put an end to the contract, but that his only remedy was to resell the 
goods under s. 107. It was held that s. 107 declared only one of the 
remedies which the vendor had on breach of the contract by the purchaser, 
and that the vendor was entitled to the benefit of s. 55. 

56. An agreement to do an act impossible in itself 
is void. 

Agreement to do 

impossible act. A contract to do an act which, after the 

contract to do contract is made, becomes impossible, or, by 

act afterwards . , . . , , 

becoming impos- reason or some event which the promisor 

sible or unlawful. 1 -, , . , , . n 

could not prevent, unlawful, becomes void 
when the act becomes impossible or unlawful. 

Where one person has promised to do something which 
compensation he knew, or, with reasonable diligence, might 
have known, and which the promisee did not 
r to be know to be impossible or unlawful, such 
unlawful. promisor must make compensation to such 

promisee for any loss which such promisee sustains through 
the non-performance of the promise. 

Illustrations. 

(a) A. agrees with B. to discover treasure by magic. The 
agreement is void. 

(b) A. and B. contract to marry each, other. Before the time fixed 
for the marriage, A. goes mad. The contract becomes void. 

(c) A. contracts to marry B., being already married to C., and 
being forbidden by the law to which he is subject to practise polygamy. 
A. must make compensation to B. for tbe loss caused to her by the non- 
performance of his promise. 

(d) A. contracts to take in cargo for B. at a foreign port. A.'s 
Government afterwards declares war against tbe country in which the 
port is situated. The contract becomes void when war is declared. 

(e) A. contracts to act at a theatre for six months in consideration 
of a sum paid in advance by B. On several occasions A. is too ill to 
act. Tbe contract on tbose occasions becomes void. 

(*) Buldeo Doss v. Howe (1880) 6 Cal. 64. 



IMPOSSIBILITY OF PERFORMANCE. 253 

Impossibility in general. Nothing resembling this section has been S. 56. 
found among the materials known to have been used by the framers of the 
Act. It varies the Common Law to a large extent, and moreover the Act 
lays down positive rules of law on questions which English and American 
Courts have more and more tended, during the last quarter of a century or 
longer, to regard as matters of construction depending on the true inten- 
tion of the parties. English authorities, therefore, can be of very little 
use as guides to the application of this section. 

With regard to the first paragraph, the result is the same as in 
England. In the Common Law we may say that parties who purport to 
agree for the doing of something obviously impossible must be deemed not 
to be serious, or not to understand what they are doing ; and also that the 
law cannot regard a promise to do something obviously impossible as of 
any value, and such a promise is therefore no consideration. " Impossible 
in itself" seems to mean impossible in the nature of things. The case of 
performance being, at the date of the agreement, impossible by reason of 
the non-existence of the subject-matter of the contract has been dealt with 
under the head of Mistake (s. 20). 

The second paragraph has the effect of turning limited exceptions into 
a general rule. By the Common Law a man who promises without 
qualification is bound by the terms of his promise if he is bound at all. If 
the parties do not mean their agreement to be unconditional, it is for them 
to qualify it by such conditions as they think fit. But a condition need 
not always be expressed in words ; there are conditions which may be 
implied from the nature of the transaction ; and in certain cases where an 
event making performance impossible "is of such a character that it 
cannot reasonably be supposed to have been in the contemplation of the 
contracting parties when the contract was made "() performance or further 
performance of the promise, as the case may be, is excused. On this 
principle a promise is discharged if, without the promisor's fault, (1) per- 
formance is rendered impossible by law () ; (2) a specific subject-matter 
assumed by the parties to exist or continue in existence is accidentally 
destroyed or fails to be produced (u), or an event or state of things assumed 
as the foundation of the contract does not happen or fails to exist, although 
performance of the contract according to its terms may be literally 
possible (x) ; (3) the promise was to perform something in person, and j 
the promisor dies or is disabled by sickness or misadventure (y). 

(t) Bally v. De Orespigny (1809) L. E. (x) Krell v. Henry [1903] 2 K. B. 740, 

4 Q. B. at p. 185. C. A. 

O) Taylor v. Caldwell (.1863) 3 B. & S. (y) Mobimon v. Davison (1871) L. II. 

826 ; llowell v. Coiipland (1876) 1 Q. B. Ex. 269, 
Div. 258. 



254 



THE INDIAN CONTRACT ACT. 



S. 56. In the last-named class of cases a disabled promisor must give the 

best practicable notice to the promisee, and the promisee has the reciprocal 
right of rescinding the contract if it is a continuing contract, and the 
disability makes it as a whole impossible of performance, though some part 
might afterwards be performed ; this on the ground not of breach of 
contract, which there has not been, but that the consideration has 
failed. In such a case the promisor cannot show that he was ready 
and willing to perform his promise (2). These rules have no bearing on 
cases where the parties have contemplated and provided for the contingency. 
In such cases the Court has only to construe the terms of their agreement (a). 
Having regard to the unqualified language of the Act, it seems useless 
to enter at more length on the distinctions observed in English law. The 
illustrations do not, indeed, appear to go beyond English authority, but 
this cannot detract from the generality of the enacting words. There is 
no reason to suppose that a broad simplification of the English rules was 
not intended, nor does it appear that any inconvenience has ensued or is to 
be expected. It is to be observed, on the other hand, that so'me of the 
English cases could not be decided in the same way under this section 
without straining the language. H. agreed to hire the use of K.'s room in 
London on the days of June 26th and 27th, 1902, for the purpose of 
seeing the intended coronation processions. By reason of the King's illness 
no procession took place on either of those days. It was held that K. could 
not recover the balance of the agreed rent, as the taking place of the 
processions " was regarded by both contracting parties as the foundation of 
the contract " (fr). Here it remained quite possible for K. to lease the use of 
the rooms to H., and for H. to use them ; it was only the object of the act 
contracted for that had failed, and that object was not mentioned in the 
contract itself, though H. took the rooms in consequence of seeing an 
announcement posted up in them that windows to view the coronation pro- 
cessions were to be let. In India such a case would perhaps fall more 
appropriately under s. 32. Illustration (a) raises a curious little question. 
If A. agrees with B. to discover by magic a treasure supposed to be buried 
within certain limits at a spot not exactly known, and, after performing 
magic rites, does by good fortune discover the treasure, and A. and B. both 
believe that the magic was efficacious, can A. recover any reward from B., 
and if so under the agreement by rejecting the specification of means to be 
employed as immaterial, or under s. 70 of the Act, or how otherwise ? 

" Becomes impossible." The Indian decisions merely illustrate what 



(z) Poussard v. Spiers $ Pond (1876) 
1 Q. B. D. 410. 
(a) Elliott v. Crutchley [1904] 1 K. B. 



565, C. A., affirmed in H. L. [1906] 
A. C. 7. 

(J) Krell v. Henry [1903] 2 K. B. 740. 



IMPOSSIBILITY OF PERFORMANCE. 255 

amounts to supervening impossibility or illegality within the meaning of S. 56. 
the second paragraph. 

In a suit for damages for breach of a contract against a Hindu father 
to give his minor daughter in marriage to the plaintiff, it was held that the 
performance of the contract had not become impossible simply because the 
girl had declared her unwillingness to marry the plaintiff, and the defendant 
had declared that he could not compel her to change her mind (e). In the 
course of the judgment the Court said : " The act is neither impossible in 
itself, nor impracticable in the ordinary sense of the term. . . . Though 
physical force cannot for one moment be thought of, it is no doubt the 
duty of defendant according to the terms of his contract to use to the 
utmost his persuasive powers and his position as parent in order to induce 
his daughter to be married." More generally, if a man chooses to answer 
for the voluntary act of a third person, and does not in terms limit his 
obligation to using his best endeavours, or the like, there is 110 reason in 
law or justice why he should not be held to warrant his ability to procure 
that act. "Similarly, where the parties to a suit agreed that the plaintiff 
and his younger brother were to execute a sale-deed within a week convey- 
ing the property in dispute in the suit to the defendant for a certain sum, 
and, in default, the suit was to be dismissed, it was held that the younger 
brother's refusal to join in executing the deed did not make the perform- 
ance of the agreement by the plaintiff impossible within the meaning of this 
section (d). Where A. agreed to cultivate indigo for B. for a certain number 
of years in certain lands of which A. was a sub-tenant, and subsequently 
during the continuance of the contract A. lost possession of the lands, as 
his immediate landlord failed to pay rent, and was in consequence ejected, 
it was held that the case came within the provisions of the second para- 
graph of this section, and that the mere fact that A. might have paid up 
the rent and thus saved the land and himself as his tenant from ejectment 
did not make the event such an one as A. could have prevented (e). 

In a Bombay case (/), the defendant, who was a stone contractor, 
agreed to pay to the plaintiff Rs. 329 per month for one year for permission 
to the defendant to blast stones and carry on the work of quarrying on 
plaintiff's land. It was also agreed that the defendant should obtain at his 
own expense the necessary licence for blasting stones. At the time of the 
agreement the defendant had a licence from the authorities, but it expired 

(c) PursJiotamdas Tribhovandas v. (e) Inder Pershad Singh v. Campbell 
Purskotamdas Mangaldas (1896) 21 Bom. (1881) 7 Cal. 474. 

23. (/) Goculdas Madhavji v. Narsu 

(d) Rangasawmi v. Trisa Maistry Yenkujl (1889) 13 Bom. 630. 
(1907) 17 Mad. L. J. 37. 



250 THE INDIAN CONTRACT ACT. 

S. 56. during the term of the agreement, and the authorities refused to renew it ; 
the defendant thereupon declined to pay the rent for the unexpired period 
of the agreement. In a suit by the plaintiff for the rent it was held that 
the question was one of construction, and that, looking at the nature of the 
contract, it must be taken to have been the intention of the parties that the 
monthly payment should only be payable so long as quarrying was per- 
mitted by the authorities. The present section was considered to have 
nothing to do with the case (g). Obviously the performance did not become 
impossible, as there was no agreement to blast any stones at all. 

" Becomes unlawful." By a contract made with the plaintiffs the 
defendants agreed to carry from Bombay to Jedda in their steamer 500 
pilgrims who were about to arrive in Bombay from Singapore in the 
plaintiffs' ship. The pilgrims arrived in Bombay, but the defendants 
refused to receive them on board their steamer on the ground that during 
the voyage of the plaintiffs' ship to Bombay there had been an outbreak of 
smallpox on board, and that the pilgrims had been in close contact with 
those who had been suffering from the disease, and that the performance of 
the contract had under the circumstances become unlawful, having regard 
to the provisions of s. 269 of the Indian Penal Code (Act XLV of 1860). 
That section provides that whoever unlawfully and negligently does any 
act which is, or which he knows or has reason to believe to be, likely to 
spread the infection of any disease dangerous to life, shall be punished with 
imprisonment. It was held that the carrying of the pilgrims in the defen- 
dants' steamer would not have been in contravention of any law or regula- 
tion having the force of law, nor would it have been a negligent act on their 
part to do so, and that s. 269, therefore, did not apply, and that the 
defendants were bound to perform the contract (h). 

Certain later statutory enactments further define the effect of the 
present section. The Specific Relief Act I of 1877, s. 13, provides that, 
notwithstanding anything contained in s. 56 of the Contract Act, a contract 
is not wholly impossible of performance because a portion of its subject- 
matter, existing at its date, has ceased to exist at the time of the performance. 
The Transfer of Property Act IV of 1882, s. 108, provides as to property 
let on lease that if by fire, tempest, or flood, or violence of an army or of 
a mob, or other irresistible force, any material part of the property be 
wholly destroyed or rendered substantially and permanently unfit for the 
purposes for which it was let, the lease shall, at the option of the lessee, 
be void. 

O) 13 Bom. at p. 635, Sargent, C.J., Navigation. Co., Ltd. v. The It ubattino Co., 
arg. Ltd. (1889) 14 Bom. 147. 

(K) The Bombay and Persia Steam 



RECIPROCAL PROMISE TO DO THINGS LEGAL AND ILLEGAL. 257 

57. Where persons reciprocally promise, firstly, to do Ss - 57, 58 
Reciprocal pro- certain things which are legal, and, secondly, 

n^aiso ofLr unc ^ er specified circumstances, to do certain 
things illegal. other things which are illegal, the first set of 
promises is a contract, but the second is a void agreement. 

Illustration. 

A. and B. agree that A. shall sell B. a house for 10,000 rupees, but 
that, if B. uses it as a gambling house, he shall pay A. 50,000 rupees for it. 

The first set of reciprocal promises, namely, to sell the house, and 
to pay 10,000 rupees for it, is a contract. 

The second set is for an unlawful object, namely, that B. may use 
the house as a gambling house, and is a void agreement. 

Scope of the section. It is not easy to see what this and the following 
section really add to s. 24 (see the commentary thereon for explanation of 
the principle), or why they are inserted here ; but they are plain enough. 

This section applies to cases where the two sets of promises are distinct. 
When the void part of an agreement can be properly separated from the 
rest, the latter does not become invalid ; but when the parties themselves 
treat transactions, void as well as valid, as an integral whole, the Court 
also will regard them as inseparable, and wholly void (i). 

Compare s. 16 of the Specific Relief Act : " When a part of a contract 
which, taken by itself, can and ought to be specifically performed, stands 
on a separate and independent footing from another part of the same 
contract which cannot or ought not to be specifically performed, the Court 
may direct specific performance of the former part." 

58. In the case of an alternative promise, one branch 
Alternative pro- of which is legal and the other illegal, the 

mise, one branch 

being illegal. legal branch alone can be enforced. 

Illustration. 

A. and B. agree that A. shall pay B. 1,000 rupees, for which B. 
shall afterwards deliver to A. either rice or smuggled opium. 

This is a valid contract to deliver rice, and a void agreement as to 
the opium. 

Qucere whether, under the terms of this section, in case B. has offered 
and A. has accepted smuggled opium as in performance of the agreement, 

(i) Davlatsltig v. Pandit (1884) 9 Bom. v. Salierltkanoobai (1905) 7 Bom. L. K. 
1 76. See also Poonoo Bibee v. Fyez Bultsh 602, at p. 606. 
(1874) 15 B. L. R. App. 5, and Meherally 

i.e. 17 



258 THE INDIAN CONTRACT ACT. 

Ss. 58, 59. A. can still have an action against B. for failure to deliver rice. It would 
seem that A., being in pari delicto, cannot sue ; for he could not make out 
his case without showing an illegal transaction to which he was a party (k). 
The point does not seem likely to arise in practice. 

Appropriation of Payments. 

59. Where a debtor, owing several distinct debts to 
one person, makes a payment to him, either 

Application of ... _ 

payment where with express intimation, or under circum- 

debt to be dis- . 

charged is stances implying that the payment is to be 

applied to the discharge of some particular 

debt, the payment, if accepted, must be applied accordingly. 

Illustrations. 

(a) A. owes B., among other debts, 1,000 rupees upon a promissory 
note, which falls due on the 1st June. He owes B. no other debt of 
that amount. On the 1st June A. pays to B. 1,000 rupees. The 
payment is to be applied to the discharge of the promissory note. 

(b) A. owes to B., among other debts, the sum of 567 rupees. B. 
writes to A., and demands payment of this sum. A. sends to B. 567 
rupees. This payment is to be applied to the discharge of the debt of 
which B. had demanded payment. 

Appropriation of payments. In England " it has been considered a 
general rule since Clayton's Case (t) that when a debtor makes a payment 
he may appropriate it to any debt he pleases, and the creditor must apply 
it accordingly " (m). 

Debt. It was held by the High Court of Calcutta in the under-men- 
tioned case that arrears of revenue payable to Government do not constitute 
a debt within the meaning of this section (n), but this decision has been 
doubted in a later case (mi). In the case last cited the revenue for the 
January kist was in arrear, and the collector issued a notice that unless pay- 
ment was made on or before 28th March, the mahal would be sold. The 
plaintiff made the payment on 28th March, and the collector appropriated 
it to the March kist. The Court held that the payment was by implication 

(6) See Taylor v. Chester (1869) L. K. on this section, has, in the present writer's 
4 Q. B. 309, 314. humble opinion, nothing whatever to do 

(7) (1816) 1 Mer. at p. 608 ; 15 R. R. with it. The subject-matter is the effect 
at p. 166. of a landlord's receipt of rent, and the 

(m) Per Blackburn, J., City Discount analogy, if any, is remote. 

Co. v. McLean (1874) L. R. 9 C. P. 692, (n) Ganga Sishun Singh v. Mahomed 

700. A case of Davenport v. Beg., decided Jan (1907) 33 Cal. 1 193, at p. 1198. 

by the Judicial Committee in 1877 (3 (nri) Jngendra Mohan Sen v. Uma Xath 

App. Ca. 115), which we have seen cited Guha (1908) 35 Cal. 636. 



APPROPRIATION OF DEBTS. 259 

intended for the January Jcist and should have been so appropriated by the Ss. 59, 60. 
collector. 

Several distinct debts. This section deals only with the case of 
several distinct debts, and does not apply where there is only one debt, 
though payable by instalments. Thus where the amount of a decree was 
by consent made payable by five annual instalments, it was held that the 
decree-holder was not bound to appropriate the payments to the specific 
instalments named by the judgment debtor (0). 

60. Where the debtor has omitted to intimate and 
there are no other circumstances indicating to 

Application of . 

payment where which debt the payment is to be applied, the 

debt to be dis- n i . , , i T 

charged is not creditor may apply it at his discretion to any 

lawful debt actually due and payable to him 

from the debtor, whether its recovery is or is not barred by 

the law in force for the time being as to the limitation of suits. 

Creditor's right to appropriate. " If the debtor does not make any 
appropriation at the time when he makes the payment the right of applica- 
tion devolves on the creditor," and he may exercise that right until the 
very last moment, arid need not declare his intention in express terms (p). 

It is impossible to define the circumstances which may be held to 
indicate a special intention (<?). Where the earlier in date of two debts is 
of a different kind and specially secured, it will not be presumed that a 
payment made without express directions was intended to be on account of 
the earlier one (r). 

When a debtor passed two mortgage bonds to his creditor, one of 
which carried interest payable with rests, and the other carried simple 
interest, and the creditor appropriated. payments made by the debtor to 
interest on the bond carrying simple interest, it was held that the creditor 
was entitled to apply the payments to either of the debts, and that the 
mere reluctance of the debtor to pay compound interest before he executed 
the mortgage bond at such interest was no indication of the debtor's 
intention that his payments should be applied to that bond (s). But where 

(0) Fazal Husain v. Jiwan AH (1906) and the fact that the very thing which was 

All. W. N. 135. to be handed over to the creditor was to be 

Q/) Lord Macnaghten in Cory Bros. <$' given as part security for the debt, were 

Co. v. Owners of the "Mecca" [1897] held to constitute " circumstances " within 

A. C. 286, 293. the meaning of this section. 

(q) See Sansi Dhar v. AM ay Ham (>') City Discount Co. v. McLean (1874) 

(1890) All. W. N. 62, where the terms of the L. R. 9 C. P. 692, 700. 

mortgage bond, the circumstances in which 00 Kaniesii-ar Kocr v. Mahomed Mchdi. 

it was executed, the relations of the parties Hossein Khan (1898) 26 Cal. 39. 

172 



260 THE INDIAN CONTRACT ACT. 

Ss. 60, 61, by a mortgage bond the debtor agreed to repay the loan made to him by 
the creditor in kind by delivery of certain species of grain, or at his option 
in cash at a specified rate of interest, and the creditor applied several pay- 
ments in grain made by the debtor to other antecedent debts, it was held 
that the creditor was not entitled to do so, as the stipulation to repay the 
loan by delivery of grain, combined with the absence of evidence to show 
that the previous debts were to be liquidated by payments of grain, was a 
circumstance indicating that the payment was to be applied to the debt 
secured by the mortgage bond (t). 

Under this section the creditor has a discretion to appropriate a pay- 
ment by a debtor either to the principal or the interest of his debt. It is 
for the debtor to show that he had acted in such a way in respect of the 
payment as to limit the discretion of the creditor (u). As stated by the 
Judicial Committee, " unless the [debtor] could satisfy [the Court] that 
there had been an appropriation at the time of payment to the payment oft 
of the principal, the creditor had a right to consider it as a payment on 
account of the interest " (#). The same rule applies to judgment debts. 
Thus when a sum is realised on account of a decree, that amount is to be 
deducted from the interest and not from the principal(?/). " It appears to 
be a well-settled practice of the Courts to appropriate payments made upon 
a bond first to the interest due thereon, and thereafter, if any balance 
remains, to the principal " (z). 

Where a payment is made by way of dividend or composition for the 
benefit of creditors generally, the payments must, by the nature of the 
transaction, be rateably apportioned among the several debts ; and in any 
question arising with third parties, as, for example, sureties for any portion 
of the debts, every payment is deemed to be specifically appropriated " as 
so much in each and every pound of the whole amount of the debt " (a). 
See further, as to the result of this, on ss. 128, 140, below. 

61. Where neither party makes any appropriation, the 

Application of payment shall be applied in discharge of the 

nefthe e r n part h y ere debts in order of time, whether they are or 

appropriates. are n() j. b arrec i by the law in force for the time 

being as to the limitation of suits. If the debts are of equal 

(/) Sutignt Lai v. Baijnath Roy (1886) (y) Oooroo Doss Dutt v. Ooma Churn 

13 Cal. 164. Itoy (1874) 22 W. R. 525. 

() Nirpat v. Shadl (1881) All. W. N. (;) Maharaja of Benares v. liar 

119. Naraln Singh (1906) 28 All. 25. 

(a?) In Luchmesivar Sing Bahadur v. (a) Bardwell v. Lydall (1831) 7 Bing. 

Syad Lwtf'Ali Khan (1871) 8 B. L. R. 439, 494, 33 R. R. 540, 545. 
110, at p 112. 



NOVATION. 261 

standing, the payment shall be applied in discharge of each Ss. 61, 62. 
proportionally. 

This section must be read continuously with s. 60. It must be 
carefully observed that it does not lay down a strict rule of law, but only a 
rule to be applied in the absence of anything to show the intention of the 
parties. Not only any express agreement, but the mode of dealing of the 
parties, must be looked to. On the other hand, the circumstances may show 
that accounts which it was at a party's option to treat as separate were, in 
fact, treated as continuous, and then payments will be appropriated to the 
earliest unpaid item of the combined account (&). 

The English rule had been followed in India before the enactment of 
the Contract Act (c). The rule is subject to certain modifications in cases 
where trust funds capable of identification have been mixed with the 
trustee's private current account. But these belong to their own special 
subject (d). 

Contracts ivhich need not be Performed. 
Effect of nova- 62. If the parties to a contract agree 

^SSS^ to substitute a new contract for it, or to 
rescind or alter it, the original contract need 

not be performed. 

Illustrations. 

(a) A. owes money to B. under a contract. It is agreed between 
A., B., and 0. that B. shall thenceforth accept C. as his debtor instead 
of A. The old debt of A. to B. is at an end, and a new debt from 0. 
to B. has been contracted. 

(b) A. owes B. 10,000 rupees. A. enters into an arrangement with 
B., and gives B. a mortgage of his (A.'s) estate for 5,000 rupees in 
place of the debt of 10,000 rupees. This, is a new contract, and 
extinguishes the old. 

(c) A. owes B. 1,000 rupees under a contract. B. owes 0. 1,000 
rupees. B. orders A. to credit C. with. 1,000 rupees in his books, but 
C. does not assent to the arrangement. B. still owes C. 1,000 rupees, 
and no new contract has been entered into. 



Novation. The meaning of " novation," the term used in the 
marginal note to this section, and now the accepted catchword for its 

(ft) Hooper v. Keay (1876) 1 Q. B. D. sappah v. Gadiyi Muddappa (1871) 6 

178 (current account with continuing M. H. . 197. 

partner after dissolution of firm). (d) See Re IlalleWs Estate (1880) 13 

(c) Mooneappah v. Vencatarayadoo Ch. Div. 696 ; Re Stennlng [1895] 2 Ch. 

(1870) 6 M. H. C. 32 ; Hirada Karibas- 433. 



262 THE INDIAN CONTRACT ACT. 

S. 62. subject-matter, has been thus defined .in the House of Lords : " that, 
there being a contract in existence, some new contract is substituted for it 
either between the same parties (for that might be) or between different 
parties, the consideration mutually being the discharge of the old contract. 
A common instance of it in partnership cases is where upon the dissolution 
of a partnership the persons who are going to continue in business agree 
and undertake, as between themselves and the retiring partner, that they 
will assume and discharge the whole liabilities of the business, usually 
taking over the assets ; and if, in that case, they give notice of that arrange- 
ment to a creditor, and ask for his accession to it, there becomes (sic) a 
contract between the creditor who accedes and the new firm to the effect 
that he will accept their liability instead of the old liability, and, on the 
other hand, that they promise to pay him for that consideration " (e). 

For the case of a novation on a change in the constitution of a firm it 
is declared in England by s. 17, sub-s. 3, of the Partnership Act, 1890, 
that " a retiring partner may be discharged from any existing liabilities 
by an agreement to that effect between himself and the members of the 
firm as newly constituted and the creditors, and this agreement may be 
either express or inferred as a fact from the course of dealing between the 
creditors and the firm as newly constituted." This adds nothing to the 
law as already settled (/). 

It has to be considered in every case not only whether a new debtor 
has consented to assume liability, but whether the creditor has agreed to 
accept his liability in substitution of the original debtor's. In some 
circumstances the creditor may be entitled to sue the retiring or the 
incoming partner in a firm at his option ; mere continuing to deal with 
the firm as reconstituted will not preclude him from suing his original 
debtor (#). Novation is not consistent with the original debtor remaining 
liable in any form (h) ; it requires as an essential element that the right 
against the original contractor shall be relinquished, and the liability of the 
new contracting party accepted in his place (i). 

It is an elementary rule that trustees and others administering money 
of which they are not the beneficial owners are not entitled to make a 
novation (which is to accept one security or liability instead of another) 
except so far as they are authorised by the trusts under which they act (&). 

(e) Lord Selborne in Scarf v. Jardine and his choice when made is final. 
(1882) 7 App. Ca. 345, 351. (A) See Commercial Bank of Tasmania 

(/) See Rolfe v. Flower (1865) L. R. 1 v. Jones [1893] A. C. 313. 
P. C. 27 ; Bilborough v. Holmes (1876) 5 (i) Nadlmulla v. Channappa (1903) 5 

Ch.D. 255. Bom. L. R. 617; Muhammad SJiah v. 

O) Scarf \. Jardine (1882) 7 App. Ca. Sarsuti (1883) All. W. N. 254. 
345, 351. He cannot, however, sue both, (k) Smith v. Patrick [1901] A. C. 282. 



NOVATION. 268 

Election to accept the sole liability of new or surviving partners in a S. 62. 
firm does not need very strong proof, but merely ambiguous acts will not 
do. One of two bankers in partnership died. A customer, knowing of 
this, drew out part of a sum standing in his name on deposit account, and 
took, according to the usual course, a fresh deposit note for the amount 
left in, signed by a cashier on behalf of the firm. This was no proof of 
novation (I). Another customer, also with the knowledge of the former 
partner's death, transferred a sum of money from current to deposit 
account (after consulting the surviving partner about investing it) and 
took a receipt signed by the surviving partner on behalf of the firm. This 
was a new contract with the surviving partner alone (ni). 

The present section does not apply where the agreement to substitute 
a new contract for the original one is made after the breach of the original 
contract. In a Calcutta case (n) the plaintiff sued the defendant to recover 
a sum of Es. 1,100 due on a bond. It was found that after the due date 
of the bond the plaintiff agreed to accept from the defendant in satisfaction 
of the bond Rs. 400 in cash and a fresh bond for Rs. 700 (not the mere 
promise to pay the Rs. 400 and to give a bond for Rs. 700). The defendant 
failed to pay the Rs. 400 and to pass the bond, and the plaintiff sued to 
recover the amount of the original bond. For the defendant it was 
contended that the subsequent agreement had made a novation. The 
Court, however, held that s. 62 did not apply, as the subsequent agreement 
was entered into after the breach of the original contract, and that the 
defendant, having failed to perform the satisfaction which he had promised 
to give, remained liable on the original contract. " If the parties to a 
contract have in fact made a new contract in substitution of the old, or 
have modified the old one,- then the old contract is at an end, and the new 
contract or the modified contract takes its place ; but the mere fact of one 
party alleging that a new contract has been substituted for the old one does 
not of itself put an end to the old contract, even as against the party who 
so alleges, unless the allegation is proved to be true. S. 62 of the Contract 
Act made no difference in the law in that respect " (0). 

Whether or not there is a novation of a contract is in each case a 
question of fact.' Thus, in a suit (p) by the Government of Bengal against 
the defendant as surety for the treasurer of a collectorate on four surety 
bonds executed by the defendant, the Judicial Committee held that the 

(0 Re Head [1893] 3 Ch. 426. 0) Per Garth, C.J., in Uoushan Bibee 

(ni) Be Head (No. 2) [1894] 2 Ch. 236, v. Hurray Kristo Nath (1882) 8 Gal. 

C. A. 926, 929. 

() Manohur v. Tkaltur Das (1888) 15 (^p) Lola Bannhidhar v. The Govern* 

Cal. 319. went of Bengal (1872) 9 B. L. E. 364. 



264 THE INDIAN CONTRACT ACT. 

S. 62. mere fact that the collector examined the accounts at the end of each year 
and struck the balance which he certified to be correct, and that on each 
occasion the defendant executed a new bond without, however, the old 
bonds being cancelled or given up, did not constitute a novation of the old 
bonds so as to preclude the Government from suing the defendant on the 
old bonds on subsequent discovery of embezzlement of moneys by the 
treasurer during each year. 

Alteration of Contract. In English usage the term novation is confined 
to agreements which introduce a new party. It is not applied to the 
substitution of a new agreement, or the variation of particular terms in a 
subsisting agreement, between the same parties. Practically the most 
important questions arising in this last connection are questions of evidence, 
and for this purpose the rules forbidding the admission of oral evidence to 
contradict or vary written agreements (q) have to be borne in mind. It 
must of course be shown, especially whore it is sought to prove a variation 
not by an express agreement, but by a course of conduct, that the variation 
was intended and understood by both parties (/*). In the case of such an 
agreement to substitute a new contract, that which is substituted must be a 
contract capable of being enforced in law ; so that if by reason of any want 
of formality, such as registration, the document containing the contract is 
inadmissible in evidence, the original contract will still be operative (s). 
In Sirdar Kuar v. Chandrawati (t) accounts were stated between a creditor 
and his debtor, and the latter passed the former a bond for the balance 
found due payable by instalments, in which he hypothecated certain 
immovable property as collateral security. The creditor received payment 
of three of the instalments under the bond, and then brought a suit against 
the debtor for the balance of the debt, basing his claim on the accounts 
stated. It was held that the suit would not lie, as by the execution of the 
bond the debt due on the accounts stated had come to an end. It appears 
from the report of this case that the bond was impounded by the revenue 
authorities, as it was insufficiently stamped, and this seems to be the reason 
for bringing the suit on the original debt instead of on the bond. It has 
been held (u) that this decision does not apply if the execution of the 

(</) Laid down for British India in the (*) Nundo Kishore Lull v. Mu$st. 

Evidence Act, s. 92; as to the effect of Ramsookhee Kooer (1879) 5 Cal. 215; 

subsequent variation on the right to Raja Raw v. Meher Khan (1882) Punj. 

specific performance, see Specific Relief Rec. no. 66 ; Udho Shah v. Ifira Shah 

Act, s. 26 (e). (1897) Punj. Rec. no. 71. 

(?) See Darnley v. L., <?., and D. R. (f) (1882) 4 All. 330. 

Co. (1867) L. R. 2 H. L. at p. 60, an inci- (w) Kiam-ud-din v. Rajoo (1888) 11 

dental elementary dictum in a case All. 13. 
decided on peculiar facts. 



ALTERATION OF DOCUMENT. 265 

hypothecation bond is denied by the defendant, and the bond remains on S. 62. 

that ground unregistered. In such a case the plaintiff could not sue on the 

unregistered bond (v), and he would therefore be entitled to recover upon 

the account stated. " We cannot allow the defendant to take advantage 

of her own fraudulent conduct in preventing registration of the bond, and 

to say that in that bond was represented the contract which superseded 

that which is to be inferred from the statement of accounts " (a;). 

Transfer of actionable claims. As to assignment of debts and 
actionable claims, see the Transfer of Property Act IV of 1882, Chap. VIII. 

Promissory note on account of pre-existing debt. The cases referred 
to above must be distinguished from those where a person lends money or 
sells goods to another, and the debtor or buyer gives a promissory note for 
payment of the loan or price at a future time. In such cases the rule is 
that where a cause of action for money is once complete in itself, whether 
for goods sold or for money lent, or for any other claim, and the debtor 
then gives a note to the creditor for payment of the money at a future time, 
the creditor, if the note is not paid at maturity, may sue for the original 
consideration, and if from any cause the bill or note is not admissible in 
evidence, this will not affect the original cause of action. But where the 
original cause of action is on the note itself, and there is no cause of action 
independent of it, as, for instance, when, in consideration of A. depositing 
money with B., B. contracts by a promissory note to repay it with interest 
at six months' date, there is no cause of action for money lent or otherwise 
than upon the note itself, because the deposit is made upon the terms contained 
in the note, and no other. In such a case the note is the only contract between 
the parties, and if, for want of a proper stamp or some other reason, the note 
is not admissible in evidence, the creditor must lose his money (y). 

Excursus to S. 62 : Unauthorised alteration of documents. What 
if the document recording an agreement is altered without the consent of 
both parties ? No answer to this question is given by the Contract Act, 
or anywhere in the Anglo-Indian Codes, but Indian practice (notwithstand- 
ing a solitary reported opinion to the contrary) (z) follows the authorities 
of the Common Law. The rule is that any material alteration in an 

(i>) See Indian Eegistration Act III of Ganesh Das (1891) Pun]'. Eec. no. 82; 

1877, s. 49. Baldeo v. Mvl Chand (1904) Punj. Rec. 

(a?) Kiam-ud-din v. Rajoo (1888) 11 no. 7. 

All. 13. (z) Ede v. KatvLo Nath Shaw (1877) 3 

(y) SJteiklt Akbar v. Slie'Mi Khan Cal. 220, where it seems to be supposed 

(1881) 7 Cal. 256 ; Dargavarapu v. Ram- that s. 37 of the Contract Act has 

pratapu (1902) 25 Mad. 580 ; Yarlagadda abolished all defences to actions on 

Veera Ragarayya v. Gorantla Ramayya contracts not expressly mentioned in the 

(1906) 29 Mad. Ill ; Rahmatulla v. Act. 



266 THE INDIAN CONTRACT ACT. 

S. 62. instrument made by a party, or by any one while it is in the party's 
custody or in that of his agent, disables him from relying on it either as 
plaintiff or as defendant (). In its earliest form it was connected with the 
old manner of pleading and producing deeds, but in modern times it was 
deliberately extended on grounds of policy : " A party who has the custody 
of an instrument made for his benefit is bound to preserve it in its original 
state " (&). The principle is said to be " founded on great good sense, 
because it tends to prevent the party in whose favour [an instrument] is 
made from attempting to make any alteration in it " ; and it is "as applicable 
to one kind of instrument as to another" (c). Any alteration is material 
which affects either the substance of a contract expressed in the docu- 
ment (d), or the identification of the document itself, at all events where 
identification may be important in the ordinary course of business (). 
Alterations are immaterial if they merely express what was already implied 
in the document, or add particulars consistent with the document as it 
stands, though superfluous (/), or are innocent attempts to correct clerical 
errors (g). There may be cases of wilful fraud practised by a stranger 
where the rule will not be held to operate against the person who had the 
custody of the document (h). It may be that some degree of negligence 
on his part would in such a case have to be shown before he could be 
deprived of his rights. 

Indian decisions. The Indian decisions on the subject may be 
divided into two classes. The first class comprises cases in which the 
suits were for bond debts brought upon the basis of altered documents. 
The second class relates to suits on documents which by the very execution 
thereof effect a transfer of interest in specific immovable property. As 

(a) Leake, 573 ; Pattinson v. Luchley substantially the same note. It does not 

(1875) L. R. 10 Ex. 330 ; Suffellv. Bank follow that in other kinds of documents 

of England (1882) 9 Q. B. Div. 555, where commonly marked with consecutive num- 

authorities are collected ; notes to Master bers the numbers are material ; but the 

v. Miller in 1 Sm. L. C. fact that a person takes the trouble of 

(i) Davidson v. Cooper (1844) 13 M. & altering a number shows that in his 

W. ?43, 352, 67 B. R. 638, Ex. Ch. opinion, at any rate, it is material for 

(c) Grose, J., in Master v. Miller (1791) some purpose. 

4 T. R. 320, 345, 2 R. R. 399, 406, 1 Sm. (/) Lowe v. Fox (1887) 12 App. Ca. 

L. C. at p. 795. 206, where the document was a form of 

(d) The alteration need not be obviously statement required by the Lunacy Act 
to the disadvantage of the party whose then in force. 

position is altered. See Gardner v. Walsh (g) Howgate and Osborn's Contract 

(1855) 5 E. & B. 83. [1902] 1 Ch. 451. 

(e) Stiffell v. Sank of England (1882) (7t) Per Lord Herschell, 12 App. Ca. at 
9 Q. B. Div. 555. A Bank of England p. 217. 

note with the number altered is not 



ALTERATION OF DOCUMENT. 267 

to the former class of cases, the Indian Courts have followed the principles S. 62. 
of English law set out above, the point for decision in each case being 
whether the alteration was or was not material. Thus where a bond was 
passed to the plaintiff by one of three brothers, and the plaintiff forged 
the signature of the other two to the bond, and brought a suit upon it in 
its altered form against all the three brothers, it was held that the alteration 
avoided the bond (). In such a case the plaintiff is not entitled to a 
decree even against the real executant. Similarly, where the date of a bond 
was altered from llth September to 25th September, it was held that the 
alteration was material, as it extended the time within which the plaintiff 
was entitled to sue ; it did not matter that the period of limitation, though 
reckoned from llth September, had not expired at the date of the suit (&). 
Likewise, where the plaintiff altered a bill of exchange from D.P., that is, 
documents to be delivered against payment, into D.A., that is, documents 
to be delivered against acceptance, it was held that the drawer was not 
liable upon the altered bill (/). But the fact that the signature of an| 
attesting witness has been affixed after execution to a bond that does not 
require to be attested is not a material alteration, and does not make the 
bond void (ni). Nor is it a material alteration to add in a document a 
description of immovable property which is not within the scope of the 
document (). And where a seller of goods inserted in the document of 
sale a clause excepting a claim on a former account, it was held in a suit 
by him for the price of the goods that the alteration was not material so as 
to defeat his claim for the price (0). Besides the alteration being material, 
it must have been made in a document which is the foundation of the 
plaintiff's claim. A material alteration, therefore, in a written acknowledg- 
ment of debt does not render it inoperative, as the acknowledgment is 
merely evidence of a pre-existing liability (p). In the last-mentioned cases, 

(/) Gogun Cliunder Ghose v. Dhuroni- 2 Mad. L. J. 39 ; Mangal Sen v. Cannon 

dhur (1881) 7 Cal. 616 ; Gour Chandra Das (1885) Punj. Kec. no. 118. 
v. Prasanna Kumar Chandra (1906) 33 () Abtlool Hoosein v. Goolam Hoosein 

Cal. 812 ; Karamali v. Naraln Singh (1900) (1906) 30 Bom. 304, 318. 
Punj. Eec. no. 91. (o) Goi-indasami Naidu v. Kuppu-sami 

(It) Govindasami v. Kuj>putami (1889) Plllai (1893) 3 Mad. L. J. 266. 
12 Mad. 239. (p) Atmamni v. Umedrant (1901) 25 

(1) MeshaAhronel v. The National Banlt. Bom. 616 (where the date of the acknow- 

of India, Ltd. (1903) 5 Bom. L. R. 524. ledgment was altered) ; Ilarendra Lai 

(w) Kashi Naih Roy v. Surbanand Roy v. Uma Cliaran Ghosh (1905) 9 C. 

Shaha (1885) 12 Cal. 317 ; Venkatcsh v. W. N. 695 (where an entry as to interest 

Baba (1890) 15 Bom. 44; Ramayyar v. was interpolated in the acknowledgment) ; 

Shanmugam (1891) 15 Mad. 70, dissent- Lai Saha v. Monmohan Gossami (1900) 5 

ing from Sitaratn v. Daji (1883) 7 Bom. C. W. N. 56, where the suit was founded 

418; Hamier v. Shunmtigam Pillai (1892) on the original loan, and the plaintiff 



268 THE INDIAN CONTRACT ACT. 

S. 62. it is to be observed, the suit was not founded on the acknowledgment, but 
on the original loan, and the acknowledgment was relied on merely to save 
the plaintiff 's claim from being barred, and the Court admitted it in evidence 
for that purpose. But where a creditor bases his suit, not on the original 
loan, but on a bond passed by the defendant, and it is found at the 
hearing that the bond has been materially altered so as not to entitle him 
to a decree on the bond, the plaintiff will not be allowed to fall back 
upon the original consideration, and to rely on the altered bond as proof 
of acknowledgment (q). And it has been held by the Madras High Court (r) 
that a purchaser for value of a piece of land from a person empowered to 
sell under a will is not precluded from relying upon the will to prove the 
validity of the sale, though forged attestations are added to the will after 
the sale. The decision is obviously right, for the purchaser never had the 
custody of the will, nor is a will a document to which any one, properly 
speaking, is party or privy ; and his title was complete before the forged 
attestations were made. 

We shall next consider the cases where the effect of the execution of the 
altered document is to create an interest in the property comprised in the 
document. Of the five Indian decisions on this head two relate to hypo- 
thecation bonds, and three to mortgages (s) of immovable property. The 
rule to be derived from these cases may be stated as follows : A material 
alteration, though fraudulent, made in a mortgage or hypothecation bond 
does not render it void for all purposes, and the altered document may be 
received in evidence on behalf of the person to whom it is executed for 
the purpose of proving the right title or interest created by, or resulting 
from, the execution of the document, provided that the suit is based on such 
right, and not on the altered document. This rule is professedly founded 
by Indian Courts on English decisions (f). The reason is stated to 

relied on a promissory note alleged to (.?) " A mortgage " in this country is 

have been passed by the defendant as " tlie transfer of an interest in specific 

evidence of the loan. It was found that immovable property for the purpose of 

the note was not genuine, but the plaintiff securing the payment of money advanced 

was allowed to prove the debt by other or to be advanced by way of loan," etc. : 

evidence, on the ground that, though the Transfer of Property Act, 1882, s. 58. 

note was forged, the suit was not founded (?) Davidson v. Cooper (1844) 13 M. & 

on the note. This is a case of entire W. 343, G7 R. R. 638 ; Doe d. Heartland 

fabrication, as distinguished from altera- v. Hirst (1821) 23 R. R. 756 ; Tfntcftinsv. 

tion, of a document. Scott (1837) 2 M. & W. 809, 46 R. R. 770 ; 

(if) Oour Chandra Das v. Prasanna West v. Steward (1845) 14 M. & W. 47; 

Kumar Chandra (190G) 33 Cal. 812 Agricultural Cattle Insurance Co. v. 

(where names of parties were added). Fitzgerald (1851) 16 Q. B. 432. See 

(?) Paramma v. Ramachandra (1883) these cases collected in Mangal Sen v. 

7 Mad. 302. S/iankar (1903) 25 All. 580. 



ALTERATION OF DOCUMENT. 269 

be that the right title or interest created by, or resulting from, the very S. 62. 
fact of the execution of a document does not rest on a contract or a 
covenant, but arises by operation of law, and a subsequent alteration, 
therefore, does not divest the vested right and revest the property in the 
mortgagor (u). 

In the earliest of these cases, known as Ramasamy Kon's Case (x), the 
plaintiff, who held a hypothecation bond from the defendants, altered the 
date of the bond so as to bring the personal remedy, which according to 
the true date was barred, within the period of limitation. The suit was to 
recover the balance of the bond debt from the defendants personally, and 
by sale of the hypothecated property. The Court passed a decree for the 
amount due against the properly, holding that the altered document might 
be used as proof of the right created by or resulting from its having been 
executed. The exact frame of the plaint in this case is not stated in the 
report, and, according to later cases, the decision could only be upheld if 
the suit was not based on the altered document (//). In Ganga Ram v. 
Ghandan Singh (#), a case similar to the above, a hypothecation bond was 
fraudulently altered by the plaintiff so as to comprise a larger area of land 
than was actually hypothecated. The suit was brought on the altered 
bond, and it was held in appeal by the High Court of Allahabad that the 
suit was rightly dismissed by the lower Court (a). In a subsequent 
Madras case (b) the plaintiff sued to recover the principal and interest due 
on a mortgage bond fraudulently altered by him by doubling the rate of 
interest and inserting a condition making the whole sum payable upon 
default of payment of any one instalment. The suit was brought on the 

(u) Christackarluv. Karibasayya (1885) appellants in both appeals. 
9 Mad. 399, 412 ; Subrahmania v. Krishna (y) See Christacharlv, v. Karibasayya 
(1899) 23 Mad. 137, 143 ; Mangal Sen v. (1885) 9 Mad. 399, 410, 420. 
Shankar (1903) 25 All. 580, 596, 604. In (z) (1881) 4 All. 62. 
the last of these cases, Aikman, J., said in (a) Though the soundness of this 
a dissenting judgment that the view that decision has not been questioned, there is 
the rule as to material alteration has no a passage in the judgment, " The bond 
application to the case of mortgages would now produced by the plaintiff should be 
be a premium on dishonesty, and would discarded as evidence of the hypothecation 
enable a mortgagee to try the experiment of land," which is against the principles 
of claiming a fraudulently enhanced set out in the text, and is held in sub- 
amount of mortgage money without the sequent cases to be against the weight of 
risk of losing when the fraud is dis- authority. See Christacharlu v. Kari- 
covered: pp. (ill, 612. basayya (1885) 9 Mad. 399, 412; and 

(a?) (1866) 3 M. H. C. 247. The judg- Mangal Sen v. ShanTtar (1903) 25 All. 

ment in this case was pronounced in two 580, 604. 

appeals relating to the same point. (i) Ckristacliarhi v. Karibasayya 

Ramasamy Kon and others who were (1885) 9 Mad. 399. 
plaintiffs in the original suit were 



270 THE INDIAN CONTRACT ACT. 

S. 62. altered bond, and the full Bench confirmed the decision of the Courts 
below, dismissing the plaintiffs entire claim. In Subrahmanta v. 
Krishna (c), on the other hand, where also a mortgage bond was altered 
in a material respect, the suit was not based on the altered bond (d), and 
the Court allowed the bond to be used as proof of the mortgagee's right to 
sell the property. In the last of the series of cases, decided by a full 
Bench of the Allahabad High Court (e), a puisne mortgagee brought a suit 
for sale against his mortgagors, and impleaded therein as a defendant a 
prior mortgagee, offering to redeem the prior mortgage. The prior mort- 
gage, when tendered in evidence by the prior mortgagee, was found to 
have been tampered with, and altered in a material particular, the extent 
of the share mortgaged having been increased. Upon these facts it was 
held that such alteration did not render the instrument void in toto, so as 
to justify the Court in ignoring its existence and passing a decree in favour 
of the plaintiff for sale of the property comprised in it without payment of 
the amount due under it to the prior mortgagee. It will be seen that in 
this case there was no suit brought upon the altered document, nor was 
the prior mortgagee a plaintiff ; but the decision of the majority of the 
full Bench did not rest upon these narrow grounds (/). 

In both these classes of cases it has been held that where a suit is 
brought by a plaintiff on a document fraudulently altered by him he will not 
be allowed subsequently to amend the plaint so as to base his claim on the 
document as executed by the defendant (g). The Courts do not appear to 
have decided in these cases that the defendant is not liable in some form of 
proceeding to repay money which he has actually received (h). 

In the case of negotiable instruments the English rule has been 
adopted to its full extent, as will be seen from ss. 87 89 of the 
Negotiable Instruments Act XXVI of 1881 : 

S. 87 : "Any material alteration of a negotiable instrument renders 

(c) (1899) 23 Mad. 137. which a defendant (prior mortgagee) has 

(<f) 23 Mad. p. 143. O'Farrell, J., held an interest without compensating him for 

in a dissenting judgment that the suit such interest, because on production of 

was based upon the altered document : his title-deed it is found to have been 

p. 149. tampered with." See 25 All. pp. 588, 

(e) Nangal Sen v. Shankar (1903) 25 601. 

All. 580. (#) Gogun Chunder Ghose v. Dhuro- 

(/) It has not been overlooked that nidhur (1881) 7 Cal. 616 ; Ganga Ram v. 

Stanley, C.J., in two places distinguishes Chandan Singh (1881) 4 All. 62 ; C/trixta- 

this case from Gangaram v. Chandan charlu v. Karibasayya (1885) 9 Mad. 

Singh (1881) 4 All. 62, supra, stating, " It 399. 

is one thing for the Court to refuse its aid (/<) See observations of Stanley, C.J., 

to a fraudulent plaintiff, and another in Mangal Sen v. Sltanluir (1903) 25 All. 

thing to direct the sale of property in 580, at p. 599. 



DISPENSATION FROM PERFORMANCE. 271 

the same void as against any one who is a party thereto at the time of Ss. 62, 63. 

making such alteration, and does not consent thereto, unless it was made in 

order to carry out the common intention of the original parties ; and any 

such alteration, if made by an indorsee, discharges his indorser from all 

liability to him in respect of the consideration thereof. The provisions of 

this section are subject to those of ss. 20, 49, 85, and 125." 

S. 88 : " An acceptor or indorser of a negotiable instrument is bound 
by his acceptance or indorsement, notwithstanding any previous alteration 
of the instrument." 

S.'89 : "Where a promissory note, bill of exchange, or cheque, has 
been materially altered, but does not appear to have been so altered, or 
where a cheque is presented for payment which does not, at the time of 
presentation, appear to be crossed, or to have had a crossing which has 
been obliterated, payment thereof by a person or banker liable to pay, and 
paying the same according to the apparent tenor thereof at the time of 
payment and otherwise in due course, shall discharge such person or banker 
from all liability thereon ; and such payment shall not be questioned by 
reason of the instrument having been altered, or the cheque crossed " ('). 

The framers of the Negotiable Instruments Act must have assumed 
that the English rule was applicable in India to other kinds of instruments ; 
for it would be an absurd state of the law if such a rale applied to negotiable 
instruments alone. 

63. Every promisee may dispense with or remit, 
wholly or in part, the performance of the 

Promisee may . 

dispense with or promise made to mm, or may extend the time 

remit performance , , 

of promise. tor such performance, or may accept instead of 

it any satisfaction which he thinks fit. 

Illustrations. 

(a) A. promises to paint a picture for B. B. afterwards forbids 
him to do so. A. is no longer bound to perform the promise. 

(b) A. owes B. 5,000 rupees. A. pays to B. and B. accepts, in 
satisfaction of the whole debt, 2,000 rupees paid at the time and place 
at which the 5,000 rupees were payable. The whole debt is discharged. 

(c) A. owes B. 5,000 rupees. C. pays to B. 1,000 rupees, and B. 
accepts them, in satisfaction of his claim on A. This payment is a 
discharge of the whole claim (&). 

(i) The English Bills of Exchange Act, to its original tenor, whereas the Indian 

1882, s. 4, contains similar provisions. The Act only protects persons paying him 

holder in due course of a bill materially according to the apparent tenor, 
altered, the alteration not being apparent, (It) See s. 41, p. 225 above, 
can enforce payment of the bill according 



272 THE INDIAN CONTRACT ACT. 

S. 63. (d) A. owes B., under a contract, a sum of money, the amount of 

which has not boon ascertained. A., without ascertaining the amount, 
gives to B. , and B., in satisfaction thereof, accepts, the sum of 2,000 
rupees. This is a discharge of the whole debt, whatever may be its 
amount. 

(e) A. owesB. 2,000 rupees, and is also indebted to other creditors. 
A. makes an arrangement with his creditors, including B., to pay them 
a composition (I) of eight annas in the rupee upon their respective 
demands. Payment to B. of 1,000 rupees is a discharge of B.'s demand. 



Rule of the Common Law. This section makes a wide departure from 
the Common Law. In England, to quote an authoritative exposition, " it is 
competent for both parties to an executory contract by mutual agreement, 
without any satisfaction, to discharge the obligation of that Contract " ; in 
other words, as reciprocal promises are a sufficient consideration for each 
other, so are reciprocal discharges. " But an executed contract cannot be 
discharged except by release under seal, or by performance of the obligation, 
as by payment where the obligation is to be performed by payment " ; but, 
by the law merchant, the obligation of a negotiable instrument may be dis- 
charged by mere waiver (m). Subject to that exception, " the new agree- 
ment in rescission or alteration of a prior contract must in general satisfy 
all the requirements of an independent contract " (w), and so must an 
agreement to accept satisfaction for a right of action which has arisen by 
breach of a contract (0). And in particular, although the rule that the Court 
does not inquire into the adequacy of the consideration is applicable, and 
therefore anything different in kind from what is due may be a good satis- 
faction without regard to its apparent value, yet the Court cannot help 
knowing that nineteen pounds are not worth twenty pounds, and accordingly 
a less sum of money cannot be good satisfaction for a greater sum already 
due. This last rule was confirmed in our time with great reluctance by the 
House of Lords (p). But the English rules are not material in British 
India, save so far as the knowledge of them may be useful to prevent 

(7) The word " composition " has been plaintiff had discharged the defendant, 

substituted for the word " compensation " but the plea could be supported only by 

by the repealing and amending Act proving an agreement. 

(XII of 1891). 00 Leake, 623-4. 

(w) Foster v. Dawber (1851) 6 Ex. (;;) Foakes v. Seer (1884) 9 App. Ca. 

839, Finch, S. C. 678. See per Parke, B., 605, Finch, S. C. 319 ; notes to Cumber v. 

at pp. 684, 685 ; Bills of Exchange Act, Wane in 1 Sm. L. C. A negotiable instru- 

1882, s. 62. ment for the same or even a less sum will 

() Leake, 564. See King v. Gillett do ; not, of course, because it is the 

(1840) 7 M. & W. 55, 56 R. R. 616. The equivalent of money, but, on the contrary, 

common form of pleading was that the because it is not money. 



DISPENSATION FROM PERFORMANCE. 273 

misunderstanding and misapplication of English decisions founded on or S. 63. 
involving them. The intention of the present section to alter the rule of the 
Common Law is clear, and has been recognised in several Indian cases (#). 

Scope of the section. The present section and s. 62 must be construed 
so as not to overlap each other. This would be done by holding that 
agreements referred to in s. 62 are agreements which more or less aft'ect the 
rights of both parties under the contract discharged by such agreements ; 
whilst those referred to in s. 63 are such as affect the right of only one 
of the parties. The former case necessarily implies consideration, which 
may be either the mutual renunciation of right, or, in addition to this, 
the mutual undertaking of fresh obligations, or the renunciation of some 
right on the one side and the undertaking of some obligation on the other. 
It is only when the agreement to discharge affects the right of only one 
party that consideration might be found wanting, and there alone the 
Indian law departs from the English law by making provision for every 
such possible case in s. 63 (r). 

Remission of performance. The High Court of Bombay has recently 
laid down that a dispensation or remission under this section requires a 
promise (s. 2 (b) ), or, what is the same thing, an agreement (s. 2 (e) ) (s). 
"It is only by a promise that there can be a dispensation or remission 
within the meaning of s. 63 ; there must be a proposal of the dispensation 
or remission which is accepted." It has accordingly been held by that 
Court that where an agreement on behalf of a district municipality was 
required by law (/) to be in writing and under the seal of the municipality, 
a remission made by the district municipality of Trimbak which did not 
comply with those requirements was not binding on the body. At the 
same time the Court held that an agreement for dispensation or remission 
does not require any consideration, on the ground that consideration is not 
an essential part of an agreement " because we have a provision (in s. 25) 
that ' an agreement made without consideration is void ' except in the cases 
there indicated." We are unable, with great respect, to accede to the view 
taken by the High Court of the present section. 

There is nothing in the words of the section about promise, proposal, 
or acceptance, and we fail to see why any such matter should be imported, 
except on the assumption that the intention was to alter the English law of 
accord and satisfaction only by abrogating the requirement of consideration. 

(y) Nanohur Koyal v. Thakur Das Mudali (1896) 19 Mad. 398. 

Naskar (1888) 15 Cal. 319, 326 ; Davis v. (s) Abaji Sitaram v. Trimbak Munici- 

Cundasami Mudali (1896) 19 Mad. 398, polity (1903) 28 Bom. 66. 

402 ; Naoroji v. Kazi Sidick (1896) 20 (f) See District Municipal Act II of 

Bom. 636, 644. 1884 (Bombay), s. 30. 

(f) Per Cur. in Davis v. Cundasami 

i.e. 18 



274 THE INDIAN CONTRACT ACT. 

S. 63. But if consideration is no longer required, why should agreement be 
required ? The language of the Act is against it ; the illustrations 
appear rather to avoid the use of the word "agreement": see especially 
illustration (c), where the arrangement is in truth a perfectly good 
contract at common law. Put the case, a conceivable though not 
probable one, of B. remitting the performance of A.'s contract, having 
himself nothing more to perform, and A. refusing to be discharged. Can 
A. insist as a matter of right on completing performance ? Can he compel 
B., for example, to take his money or to accept delivery of marketable 
goods which B. has paid for, but does not want ? We should say, in law 
and in common sense, No. The Bombay High Court would apparently 
say Yes. We do not deny that there may be cases in which it would be to 
A.'s prejudice not to complete his performance. An artist may be entitled 
to insist on carrying through a commission for the sake of his reputation, 
or an engineer to have a bulky piece of machinery for which there is no 
market elsewhere cleared away from his workshop. But we should regard 
such cases as exceptional. The judgment under consideration seems to 
make them examples of an invariable rule. 

Had the agreement sued upon by the municipality been under seal 
(which it was not), the decision itself would perhaps be right, not because 
the remission of a promise is necessarily itself a promise or agreement, but 
on the principle of general jurisprudence that an obligation which needed 
formality to create it needs, in the absence of a special rule, no less to 
dissolve it. This seems especially applicable to corporations, which can 
only contract through their appointed officers, and largely through 
prescribed forms. 

Where a promisee remits a part of the debt, and gives a discharge for 
the whole debt on receiving the reduced amount, such discharge is valid, 
even though the remission was in pursuance of an oral agreement, which is 
inadmissible under s. 92 (4) of the Evidence Act, 1872. Thus where a 
lessor, to whom rent is due under a registered lease, accepts a smaller 
amount of rent from the lessee in pursuance of a subsequent oral agreement 
to reduce the rent, and passes a receipt in full discharge of the rent due, 
the discharge will take effect independently of the prior oral agreement, 
which certainly is not illegal, though it cannot be proved under the 
Evidence Act (). 

Agreement to extend time. An agreement simply extending the 
time for performance of a contract is exempted by this section from any 
requirement of consideration to support it. No consideration is necessary 
to support such an agreement, exactly as none is required for the total or 

() KarampalU v. TheTikn Vittil (1902) 26 Mad. 196. 



CONSEQUENCES OF RESCISSION. 275 

partial remission of performance (x). See, however, the commentary under Ss. 63, 64. 

the head " Remission of performance " (y). But an agreement by a 

mortgagee, about to exercise his power of sale, to postpone the sale for 

four days is not within this section ; for it is not an extension of the time 

for performing the mortgagor's promise to pay the debt, which time is 

already past. Redemption, when the mortgagor is entitled to redeem, is 

not a performance of the original contract to pay the debt ; and the 

exercise of the power of sale is not an exercise of a right of action on that 

contract (2). The time for performance of the contract must not be 

confounded with the time within which, notwithstanding default in 

performance, the mortgagor in default might still be allowed to redeem (a). 

These two decisions of the Bombay and Madras High Courts are quite 

consistent. 

Discharge from liability on negotiable instruments is specially dealt 
with in the Negotiable Instruments Act, 1881, ss. 82, 90. 

64. When a person at whose option a contract is void- 
able rescinds it, the other party thereto need 

Consequences . .... 

of rescission of not perform any promise therein contained in 

voidable contract. . . m . T 

which he is promisor. The party rescinding a 
voidable contract shall, if he have received any benefit there- 
under from another party to such contract, restore such 
benefit, so far as may be, to the person from whom it was 
received. 

Scope of the section. Contracts declared voidable (s. 2, sub-s. 1) 
under this Act may be divided into two groups, namely contracts voidable 
in their inception under ss. 19 and 19A on the ground of fraud or the like, 
and contracts becoming voidable by subsequent default of one party, as 
mentioned in ss. 39, 53, and 55. 

The use of the word " voidable " is immaterial. Whenever one party 
to a contract has the option of annulling it, the contract is voidable ; and 
when he makes use of that option the agreement becomes void. It has 
been suggested that the present section applies only to the first-named 
class of contracts, which are voidable for want of free consent (b] ; but 
there is no apparent good reason for not including the others. 

(a?) Davis v. Cundammi Mudall (1896) () 2b., p. 356. 

19 Mad. 398, 402. (7>) Brohmo Dutt v. Dharmo Das Gkose 

(y) P. 273, above. (1898) 26 Cal. 381, per Maclean, C.J., 

(2) Trintbah v. JBhagioandag (1898) 28 expressly without giving a final opinion. 

Bom. 348. 

182 



276 THE INDIAN CONTRACT ACT. 

S. 64. As to the applicability of this section to contracts rescinded under 

s. 39, see the commentary on s. 65 under the head " Becomes void." 

The direct application of this section, according to recognised canons 
of interpretation, is only to contracts declared voidable by the Act ; but 
the principle which it affirms is one of general jurisprudence and equity, 
and applicable in various other cases. In Sinaya Pillai v. Munixami 
Ayyan (c) a mortgage was executed by the guardian of a minor appointed 
under the Guardian and Wards Act without obtaining the sanction of the 
Court, as required by s. 29 of the Act. Such a mortgage is voidable 
under s. 30 of that Act. Here the High Court said that the mortgage 
could not be avoided on belialf of the minor, except on restoring to the 
mortgagee the benefit received by the minor's estate under the mortgage, 
and based its decision on the principle which, as the Court said, " is 
acknowledged in s. 64 of the Indian Contract Act, in s. 35 of the Transfer 
of Property Act, and generally by the Indian Courts as Courts of equity 
and good conscience." The same rule appears in ss. 38 and 41 of the 
Specific Relief Act. 

Minor's contract. It was settled that this section did not apply to a 
minor's contract, assuming that such contracts were only voidable. The 
term " person " in this section does not comprise a minor, but means such 
a person as is referred to in s. 11, namely, a person who (among other 
conditions) is of the age of majority according to the law to which he is 
subject. But, since the decision of the Judicial Committee that a minor 
is wholly incapable of contracting (d~), there is no arguable question, and 
further authority is needless. It does not follow, however, that a minor is 
entitled both to repudiate his agreement and to retain specific property 
which he has acquired under it, or to recover money after receiving for it 
value which cannot be restored. General principles of equity seem 
incompatible with such a result, and it would certainly be contrary to 
English authority (e). See notes to s. 11 under the head "Minor's 
contract," and the cases there cited. 

Election to rescind. The broad principle on which this and the 
following section rest, and which, as we have seen, is not confined to cases 



(c) (1898) 22 Mad. 289 ; Tejpal v. (e) See Valentini v. Canali (1889) 24 

Ganga (1902) 25 All. 59. See also Q. B. Div. 166, and cp. Nottingham Build- 

Kurarji v. Moti Harldas (1878) 3 Bom. ing Society v. Thurstan [1903] A. C. 6, 8, 

234. 10, and judgments of Homer, L.J., and 

(cT) Mohori B'ibee v. Dharmodas Ohose Cozens-Haidy, L.J., in C. A. [1902] 1 Ch. 

(1903) 30 Cal. 539, L. R. 30 Ind. Ap. 114, at pp. 10, 13. See Dattaram v. VinayaTt 

followed in Kamta Prasad v. Sheo Gopal (1903) 28 Bom. 181. 
Lil (1904) 26 All. 342. 



ELECTION TO RESCIND. 277 

expressly included in either of them, was thus stated in England in one of S. 64. 
the weightiest judgments of recent times : 

" No man can at once treat the contract as avoided by him, so as 
to resume the property which he parted with under it, and at the 
same time keep the money or other advantages which he has obtained 
under it"(/). 

For the same reason, a man cannot rescind a contract in part only. 
When he decides to repudiate it, he must repudiate it altogether. If he 
has put it out of his power to restore the former state of things, either by 
acts of ownership or the like, or by adopting and accepting dealings with 
the subject-matter of the contract which alter its character, as the con- 
version of shares in a company, or if he has allowed third persons to 
acquire rights under the contract for value (g), it is too late to rescind, 
and the remedy, if any, must be of some other kind. "You cannot both 
eat your cake and return your cake " (A). 

It is hardly needful to say that rescission must be express and 
unequivocal. The clearest form of it is bringing a suit to set aside the 
contract. The will to rescind may also be declared by way of defence 
to an action brought on the contract ; a declaration to that effect before 
action brought is not necessary as matter of law (/), though, generally 
speaking, the prudent course is to repudiate as soon as possible. See s. 66, 
p. 284, below. 

By the Common Law lapse of time is not of itself a bar to setting 
aside a contract (subject to the risk of indefeasible rights having been 
acquired by third persons), but may be material as evidence of acquiescence, 
that is, of a tacit election to affirm the contract. But in British India, 
by the Limitation Act (&), a suit for the rescission of a contract must be 
dismissed, even though the defence of limitation is not set up, unless 
brought within three years from the time when the facts entitling the 
plaintiff to have the contract rescinded first became known to him. 
English authorities on what amounts to acquiescence would seem, there- 
fore, to have very little practical application. 



(/) Clough v. L. fy N.- W. R. (1871) long since obsolete, and not very clear on 

L. K. 7 Ex. 26, 37 in Ex. Ch. The the facts and dates, but the rule in 

judgment was Lord Blackburn's, though question is correctly laid down, 

not delivered by him. See 7 App. Ca. at (A) Crompton, J., E. B. &, E. at p. 152. 

p. 360. (K) IX of 1908, s. 3, and Sched. I., 

(g) -Clarke v. Dickson (1858) E. B. & E. art. 114. 
148, decided on a state of company law 



278 THE INDIAN CONTRACT ACT. 

S. 65. 65. When an agreement is discovered to be void, or 

obligation of when a contract becomes void, any person who 
nas received any advantage under such agree- 
men * i or contract is bound to restore it, or to 
that becomes void. ma k e compensation for it, to the person from 
whom he received it. 

Illustrations. 

(a) A. pays B. 1,000 rupees in consideration of B.'s promising to 
marry C., A.'s daughter. C. is dead at the time of the promise. The 
agreement is void, but B. must repay A. the 1,000 rupees. 

(b) A. contracts with B. to deliver to him 250 maunds of rice 
before the first of May. A. delivers 130 maunds only before that day 
and none after. B. retains the 130 maunds after the first of May. 
He is bound to pay A. for them. 

(c) A., a singer, contracts with B., the manager of a theatre, to 
sing at his theatre for two nights in every week during the next two 

" months, and B. engages to pay her a hundred rupees for each night's 
performance. On the sixth night A. wilfully absents herself from the 
theatre, and B., in consequence, rescinds the contract. B. must pay 
A. for the five nights on which she had sung. 

(d) A. contracts to sing for B. at a concert for 1,000 rupees, which 
are paid in advance. A. is too ill to sing. A. is not bound to make 
compensation to B. for the loss of the profits which B. would have 
made if A. had been able to sing, but must refund to B. the 1,000 
rupees paid in advance. 

Duties of restitution. The matter corresponding to this and the last 
foregoing section, besides s. 39, is scattered about English books in the 
shape of technical rules and exceptions unintelligible, as usually stated, to 
any one who is not acquainted, not only with modern English law, but 
with the formulas of the ancient common law system of pleading which 
has been obsolete in England for half a century, and survives only in a 
certain number of American jurisdictions. However, the substance of 
the question involved may be put thus : " In what cases may an action 
be brought by a person who has entered into a special contract against 
the person with whom he has contracted, while his own side of the contract 
remains unperformed ? " (I) And, as in English law the plaintiff, if he 
recover at all, must do so either on the original contract or on some other 
implied contract, it has to be considered whether the special contract is 
subsisting, but the defendant has dispensed the plaintiff from performing 
his part by making it impossible or otherwise, and, if it is not subsisting, 

(0 2 Sm. L. C. 10, llth ed. 



DUTIES OF RESTITUTION. 279 

whether a new contract by the defendant to pay for work done or other S. 65. 

benefit which he has accepted, as the case may be, can be inferred. In 

the case where a party has contracted to do an entire work for a specific 

sum, he " can recover nothing unless the work be done, or it can be shown 

that it was the defendant's fault that the work was incomplete, or that 

there is something to justify the conclusion that the parties have entered 

into a fresh contract " (m). 

The illustrations to this section are rather miscellaneous. In (a) we 
have a simple case of money paid under a mistake (cp. s. 72). In (b) it 
does not seem that the contract has become void at all, but, on the 
contrary, that B. has elected to affirm it in part, and dispense with the 
residue ; there is no new contract under which he is bound to pay for the r^_ 
130 maunds of rice, as is shown by this, that what he does accept he is 
undoubtedly bound to pay for at the contract price. In (c) it is not clear 
whether the contract is to be treated as divisible, so that A. is entitled to 
Rs. 100 for each night on which she did sing, or the Court is to estimate 
what, on the whole, the partial performance was worth ; nor would it be 
clear in England without fuller statement of the terms and circumstances. 
Illustration (d) is again simpler ; English lawyers would refer it to the 
head of money paid on a consideration which fails. 

Scope of the section. This section applies only to cases where an 
agreement is discovered to be void, or when a contract becomes void. It 
does not apply to agreements which are void ab initio on the ground of 
the object or consideration being unlawful within the meaning of s. 23 of 
the Act(n). Nor does it apply in cases where there is a stipulation that, 
by reason of a breach of warranty by one of the parties to the contract, 
the other party shall be discharged from the performance of his part of 
the contract. An insurance company is not, therefore, bound under the 
provisions of this section to refund to the heirs of the assured the premiums 
paid on the policy of life assurance where the assured had committed a 
breach of the warranty by making an untrue statement as to his age (0). 

The expression " discovered to be void " seems appropriate only to 
cases where the agreement is void by reason of some fact not known to the 
parties at the time of making it. An agreement by way of wager is one 
which from its very nature must be known to the parties to be void, and, 
therefore, moneys deposited under such an agreement cannot be recovered 
under this section ( p ). A similar question is whether a transferee of a 

(ni) Appleby v. Myers (1867) L. B. 2 (0) Oriental Government Security Life 

C. P. 651, 661, judgment of the Ex. Ch. Assurance Co., Ltd. v. Narasimha Chart 

per Blackburn, J. (1901) 25 Mad. 183, 214. 

(it) Amir Khan v. Saif Ali (1893) Punj. (_p) Dayabhai Tribhorandas v. Lakh- 

Eec. no. 86. midland Panacliand (1885) 9 Bom. 358. 



U THE INDIAN CONTRACT ACT. 

S. 65. property which from its very nature is inalienable (#) is entitled under 
the provisions of this section to recover back the purchase-money from the 
transferor if the transfer is declared illegal and void by a decree of a Court 
or is otherwise discovered to be void. It would seem that he has the right 
to do so if he was not aware of the unlawful character of the transaction 
at the time it was entered into. Cases in which the object of the transfer 
is unlawful to the knowledge of both the parties do not come within this 
section. In such cases, where the illegal purpose is not carried into 
execution, the transferee will be deemed to hold the property for the 
benefit of the transferor, as provided by s. 84 of the Trusts Act. Where, 
however, the unlawful object is accomplished, the transferee will not be 
disturbed in his possession, on the principle embodied in the maxim In 
part delicto potior est conditw defendentis (r). The same rule applies where 
the unlawful object has been accomplished substantially, though not in its 
entirety (s). But the maxim requires that the act should be par delictum, 
and it will not, therefore, apply where the transferor is not as guilty and 
is not to blame as much as the transferee (t). 

The provisions of this section were held applicable in a recent Bombay 
case (), where a lease was terminated by the lessee under the provisions of 
the Transfer of Property Act on the destruction of the property by fire. In 
that case the plaintiff hired a godown from the defendant for a period of 
twelve months and paid the whole rent to him in advance. After about 
seven months the godown was destroyed by fire, and the plaintiff claimed 
a refund from the defendant of a proportionate amount of the rent, and 
subsequently brought a suit for the same. The Court held that the provi- 
sions of s. 108 (e) of the Transfer of Property Act applied to the case, and 
that the plaintiff was entitled under this section to recover the rent for the 
unexpired part of the term. The demand for a refund was treated by the 

(<) See for an illustration Krishnan v. and 20 Mad. 326 have been dissented from 

Sankara Varma (1886) 9 Mad. 441. is misleading: see per Rampini, J., on 

(r) Tamaraxherri Sivithri v Maranat p. 969, and per Mookerjee, J., on p. 983) ; 

Vasudemn (1881) 3 Mad. 215 ; Chenvi- Mussammat Roshun v. Muhammad (1887) 

rappa v. Pvttappa (1887) 11 Bom. 708 ; Punj. Rec. no. 46 ; Pirt/ia Das v. Him 

Rangammal v. Venkatachari (1895) 18 Singh (1898) Punj. Rec. no. 63 ; Pether- 

Mad. 378, (1896) 20 Mad. 323 ; Yaramati perumal v. Muniandy (1908) 18 Mad. 

v. Chundru (1897) 20 Mad. 326 ; Kondeti L. J. 277 [P. C.]. 

Kama Row v. JVukamma (1908) 31 Mad, (s) Muthuraman Chetty v. Krishna 

485 ; Goterdhan Singh v.Ritu Roy (1896) Pillai (1906) 29 Mad. 72. 

23 Cal. 962 ; Banka Sehary Dass v. Raj (0 See Trusts Act, s. 84, and Specific 

Kumar Dags (1899) 27 Cal. 231 ; Gonnda Relief Act, s. 35 (b), and illustration 

Kuar v. Lala Kishun Prosad (1900) 28 thereto. See also S/tam Lall Mitra v. 

Cal. 370 ; Jadu Nath Poddar v Rup Lai Amarendro Nath Bone (1895) 23 Cal. 460. 

Poddar (1906) 33 Cal. 967 (the portion of (u) Dhuramsey v. Aftmedbhai (1898) 23 

the head-note stating that 11 Bom. 708 Bom. 15. 



AGREEMENT DISCOVERED TO BE VOID. ^ 281 

Court as a notice to the defendant avoiding the lease (v). It was also stated S. 65. 
in the judgment that the right to compensation under this section does not 
depend on the possibility of apportionment (x). Now s. 108 of the Transfer 
of Property Act provides that, in the event of the property let being destroyed 
by fire, " the lease shall at the option of the lessee be void." S. 4 of the 
same Act provides that the sections of the Act relating to contracts shall 
be taken as part of the Contract Act. If s. 108 be regarded as one relating 
to contracts, it is clear that, the lease having become voidable under that 
section, the provisions of s. 65 of the Contract Act could have no applica- 
tion, as they do not deal with voidable contracts. Nor does s. 64 apply to 
the case, as that section is confined to the liability of a party avoiding a 
contract. The only section that seems applicable would be s. 75 of the Act. 
No doubt a voidable contract on rescission becomes void, but that could be 
no reason for the application of s. 65, as the provisions of s. 64 would 
otherwise be superfluous. 

This section does not apply to cases where a person agrees to supply 
goods to, or do some work for, a municipal corporation, and goods are 
supplied or the work done in pursuance of the contract, but the contract 
is required by the Act under which the corporation is constituted to be 
executed in a particular form, and it is not so executed. In such cases (y) 
the corporation cannot be charged at law upon the contract, though the 
consideration has been executed for the benefit of the corporation. " The 
Legislature has made provisions for the protection of ratepayers, share- 
holders and others who must act through the agency of a representative 
body by requiring the observance of certain solemnities and formalities 
which involve deliberation and reflection. That is the importance of the 
seat". It is idle to say there is no magic in a wafer. . . . The decision 
may be hard in this case on the plaintiffs, who may not have known the 
law. They and others must be taught it, which can only be done by its 
enforcement " (z). This decision was followed by the High Court of 
Allahabad in Radha Krishna Das v. The Municipal Board of Benares (a). 
The plaintiff had supplied to the defendant municipality stone ballast for 
metalling the municipal roads in accordance with his tender, which had 
been accepted, but the contract was not in writing signed by the chairman 
and secretary of the municipality, as required by the Municipal Act (ft). 

(0) See s. 66, p. 284, jwst. The "wafer" is the common modern 

(x) Citing Cunningham and Shephard's substitute for a waxen seal, 

notes to s. 65. () (1905) 27 All. 592. 

(?/) Youiig fy Co. v. Corporation of (V) N.-W. P. and Oudh Municipalities 

Royal Leamington Spa (1883) 8 App. Act XV of 1883, s. 40, and Local Act 

Cas. 517. No. 1 of 1900, s. 47. 

(c) Ibid., per Lord Bramwell, at p. 528. 



282 THE INDIAN CONTRACT ACT. 

S. 65. The plaintiff sued the municipality for the value of the materials supplied (c), 
and for damages for refusing to accept delivery of the rest of the ballast. 
It was held that the plaintiff was not entitled to recover ; the contract, 
not having been committed to writing and signed as required by the 
Municipalities Act, could not form the basis of any suit against the 
municipality, notwithstanding that ballast was supplied in pursuance of it. 
It was also held that the section did not apply, as the case was not one 
where the agreement was " discovered to be void," or had " become void," 
within the meaning of the section. This decision is in obvious conflict 
with a prior decision of the High Court of Bombay (d). In that case the 
Municipality of Trirnbak granted to the defendant the right of levying 
and collecting certain tolls for a period of fourteen months, for which the 
defendant agreed to pay to the municipality Rs. 15,001. The contract 
was required by the Bombay District Municipal Act (e) to be sealed with 
the seal of the municipality, but it was not so sealed. The defendant 
levied and collected the tolls and paid part of the agreed amount, but 
failed to pay the balance, for which the municipality brought a suit 
against him. The defence was (1) that the municipality had dispensed 
with the payment of the amount claimed, and (2) that the contract, not 
being under seal, was unlawful within the meaning of s. 23, as, if enforced, 
it would defeat the provisions of the Act, and that it could not there- 
fore be enforced against the defendant, though the consideration had been 
executed for his benefit. The defence failed on the first point for reasons 
that have been reproduced in the notes to s. 63 (/). It failed on the 
second point on the ground thus stated in the judgment : " It is a well 
recognised law in England that though a contract by a corporation must 
ordinarily be under seal, still where there is that which is known as an 
executed consideration an action will lie, though this formality has not 
been observed. Notwithstanding s. 23 of the Indian Contract Act, we 
see no reason for not adopting the same view of the law here. For we 
think, when regard is had to the principle on which the English Courts 
have proceeded, it is clear we do not run contrary to any provision of 
s. 23 of the Contract Act in holding that in this country too, as in England, 
where there is an executed consideration, a suit will lie even in the absence of 
a sealed contract." The above statement of the law was characterised by 

(c) The municipality had in this case (<f) Abaji Sitaram v. Trimbak Muni- 

paid the plaintiff for a part of the ballast cipality (1903) 28 Bom. 66. 

supplied to them, and as to another part (e) Bombay Act II of 1884, s. 30. 

supplied to them they deposited Rs. 1,094 (/) See notes to s. 63 under the head 

in Court, as the plaintiff claimed more. " Remission of performance," p. 273, 

The rest of the ballast was not accepted above, 
as being of inferior quality. 



LIMITATION OF SUIT FOR RESTITUTION. 283 

the Allahabad High Court in Radha Krishna Das's case as too wide. S. 65. 
"According to the ruling of the House of Lords," the Court said(#), 
" to which we have referred, an action will not lie in England against a 
corporation which is governed by an Act such as the Public Health Act 
of 1875 in the absence of a sealed contract, even though there is an executed 
consideration." The reference to s. 23 of the Contract Act seems to be 
irrelevant. If the plaintiff was disabled from suing, it was by the Bombay 
District Municipal Act, and the real question was whether that Act was 
imperative and not subject to any implied exception in a case where the 
consideration had been executed in favour of the municipality. 

At all events, where a contract which fails to comply with the statutory 
formalities is only executory, neither party can enforce performance against 
the other (h). 

" Any person." The obligation under this section to restore the 
advantage received under an agreement is not confined to parties to the 
agreement, but extends to any person that may have received the 
advantage (i). 

Limitation. Where an agreement is discovered to be void the period 
of limitation for a suit for a restoration of the " advantage " under this 
section runs from the date of such discovery. It was so laid down by the 
Privy Council in Bassu Kuar v. Dhum Singh (j"). In that case A. agreed 
to sell his land to B. in consideration of a debt due by him to B. on 
accounts stated. B. having declined to complete the purchase, A. brought 
a suit for specific performance, in which it was held that the agreement was 
unenforceable. B. then sued A. to recover the amount due to him. If the 
suit was regarded as one falling within article 64 of the Limitation Act for 
money due on accounts stated, it was barred by limitation under that 
article. On the other hand, if the suit was one for money paid upon an 
existing consideration which afterwards failed, it was within the period of 
limitation, as it was brought within three years from the date of the failure 
of consideration. The Privy Council took the latter view, stating that the 
agreement for the purchasing of land was discovered to be void when it was 
decreed to be ineffectual in the suit for specific performance, and that the 
consideration, therefore, failed when the decree was made, which imposed 
an obligation upon A. under this section to return the consideration money 
retained by him, and conferred a corresponding right on B. to recover the 
amount within three years from the date of the decree. 

' O) (1905) 27 All. at p. 600. (J) (1888) 11 All. 47 ; L. R. 15 Ind. Ap. 

(/t) Ahmedabad Municipality v. Sule- 211; followed in Udit Narain v. Muham- 

manji (1903) 28 Bom. 618. mad (1903) 25 All. 618. Hingam Lai v. 

(i) Girraj Baksh v. Kazi Hamid Ali Mansa Ram (1894) All. W. N. 157 is a 

(1886) 9 All. 340, 347. similar case. 



284 THE INDIAN CONTRACT ACT. 

Ss. 65 67. " Received any advantage." This, it is submitted, does not include 

a case where a plaintiff has abandoned an entire contract and left unfinished 
work buildings on the defendant's land; for instance in such circum- 
stances that the defendant cannot help keeping it ; for here, in English 
law, there is nothing to show a fresh contract to pay the actual value of 
what has been done, as there would be if the defendant had kept goods 
which he might have returned (&) ; and no reason appears why the same 
principle should not hold in India. 

In England, where a contract becomes impossible of performance by 
the destruction of the subject-matter or the failure of an event or state of 
things contemplated as the foundation of the contract to happen or exist 
(see on s. 56, above), the rule is that the parties are excused from further 
performance and acquire no rights of action, so that each must bear any 
loss or expense already incurred, and cannot recover back any payment in 
advance (/). The present section appears to include such cases so far as 
they fall within s. 56, and not to lay down any special rule with regard to 
them. It would seem, therefore, that the general rule of this section applies 
to such cases, and that, contrary to the English decisions, each party is 
bound to return any payment received. Justice, it is submitted, could be 
most nearly done by treating such payments as returnable, but allowing to 
either party compensation for anything reasonably done by him towards 
performance, whether the other party actually derived any advantage from 
it or not ; but neither the English nor the Indian rule will yield this 
result, unless indeed the Indian Courts are prepared to take a bold step 
of applying s. 70 to acts done, at the time, under a subsisting express 
contract. 

66. The rescission of a voidable contract may be corn- 
Mode of com- municated or revoked in the same manner, 
revoking 1 rescission and subject to the same rules, as apply to the 

of voidable con- ,. ,. . , 

tract. communication or revocation of a proposal. 

67. If any promisee neglects or refuses to afford the 
promisor reasonable facilities for the perform- 

Effect of neglect 1 . . . 

of promisee to ance of his promise, the promisor is excused 

afford promisor 

reasonable facilities by such neglect or refusal as to any non- 

for performance. 

performance caused thereby. 

(A) Sumpter v. Hedges [1898] 1 Q. B. Society v. General Steam Navigation Co. 

673, C. A. [1903] 2 K. B. 756, C. A. ; subject to any 

(Z) Appleby v. Myers (1867) L. E. 2 express agreement, Elliott v. Crutchley 

C. P. 651 ; Civil Service Co-operative [1906] A. C. 7. 



REFUSAL OR NEGLECT OF PROMISEE. 285 

Illustration. Ss. 67, 68. 

A. contracts with B. to repair B.'s house. 

B. neglects or refuses to point out to A. the places in which his 
house requires repair. 

A. is excused for the non-performance of the contract, if it is 
caused by such neglect or refusal. 



Refusal or neglect of promisee. The illustration is apparently 
founded on Makin v. Watkinson, decided by the Court of Exchequer 
in 1870 (m). There the question was, in effect, whether a covenant by 
lessors of a building with the lessee to repair the main walls, main 
timbers, and roofs was to be taken as absolute, or as implying that 
the lessors were entitled to have notice from the lessee of any want 
of repair. The majority of the Court held that it must be read as a 
covenant to repair on notice, as the lessor had no sufficient and reasonable 
means of ascertaining for himself what repairs were necessary. Perhaps a 
case more exactly in point is that of an apprentice, whom a master work- 
man has undertaken to teach his trade, refusing to let the master teach 
him. "It is evident that the master cannot be liable for not teaching 
the apprentice if the apprentice will not be taught " (n). Conversely, if a 
master undertakes to teach several trades, and gives up one of them, the 
apprentice need not stay with him. " If the master is not ready to teach 
in the very trade which he has stipulated to teach, the apprentice is not 
bound to serve " (0). 

CHAPTEE V. 

OF CERTAIN RELATIONS RESEMBLING THOSE CREATED BY 

CONTRACT. 

68. If a person incapable of entering into a contract, 
or any one whom he is legally bound to 

Claim for neces- J , J 

sanes supplied to support, is supplied by another person with 

person incapable of . .,,. ,...,. 

contracting, or on necessaries suited to his condition in life, the 

his account. , , . .. 

person who has furnished such supplies is 
entitled to be reimbursed from the property of such incapable 
person. 

(vi) L. R. 6 Ex. 25. " stipulated " is incorrect. . A man stipu- 

(n) Raymond v. Mlnton (1866) L. R. 1 lates for what he is to be entitled to, not 

Ex. 244. for what he is to perform. The term is 

(o) Ellen v. Topp (1851) 6 Ex. 424 f proper to Roman law, and is better 

442, 86 R. R. 353. The use of the word avoided in our system. 



286 THE INDIAN CONTRACT ACT. 

Ss. 68, 69. Illustrations. 

(a) A. supplies B., a lunatic, with necessaries suitable to his 
condition in life. A. is entitled to be reimbursed from B.'s property. 

(b) A. supplies the wife and children of B., a lunatic, with neces- 
saries suitable to their condition in life. A. is entitled to be reimbursed 
from B.'s property. 

Minors. Since the decision of the Judicial Committee in MohoriBibi 
v. Dhurmodas Ghose (p) it is clear that this section applies to minors as 
well as to persons of unsound mind (see the illustrations) and others, if 
any, disqualified from contracting by any law to which they are subject. 
It is therefore needless to consider the doubts expressed in earlier Indian 
cases. 

"Necessaries." Costs incurred in successfully defending a suit on 
behalf of a minor in which his property was in jeopardy are " necessaries " 
within the meaning of this section (q). And so are costs incurred in 
defending him in a prosecution for dacoity (r). So also is a loan to a 
minor to save his property from sale in execution of a decree (s). 

As to the definition of necessaries in general, see on s. 11, above. 

Reimbursement 69. A person who is interested in the 

payment of money which another is bound by 
law to pay, and who therefore pays it, is 
entitled to be reimbursed by the other. 

Illustration. 

B. holds land in Bengal, on a lease granted by A., the zamindar. 
The revenue payable by A. to the Government being in arrear, his land 
is advertised for sale by the Government. Under the revenue law, 
the consequence of such sale will be the annulment of B.'s lease. B., 
to prevent the sale and the consequent annulment of his own lease, 
pays to the Government the sum due from A. A. is bound to make 
good to B. the amount so paid. 

O>) (1903) 30 Cal. 593 ; L. R. 30 Ind. Appasami (1894) 17 Mad. 257, it was held 

Ap. 114. under similar circumstances that the suit 

(#) WatUns v. Dhunnoo Baloo (1881) would not lie. See also Venltata v. 

7 Cal. 140. In this case the suit was Timmayya (1898) 22 Mad. 314. 

brought by an attorney appointed by the (?) Sham Charari Mai v. Chowdhry 

guardian ad litem of the minor to recover Debya Singh (1894) 21 Cal. 872. See 

his costs from the minor. The attorney also Sundaraja Ayyangar v. Pattana- 

was engaged by the guardian, and no thusami Tevar (1894) 17 Mad. 306. 

question was raised as to whether under (g)Kidar Nath v. Ajudhia (1883) Punj. 

the circumstances the suit would lie Rec. no. 185. See also Atmaram T. Hunar 

against the minor. In Branson v. (1888) Punj. Rec. no. 96. 



REIMBURSEMENT AND INDEMNITY. 287 

English law. This section lays down in one respect a wider rule than S. 69. 
appears to be supported by any English authority. The words "interested 
in the payment of money which another is bound by law to pay " might 
include the apprehension of any kind of loss or inconvenience, or at any 
rate of any detriment capable of being assessed in money (f). This is not 
enough, in the Common Law, to found a claim to reimbursement by the 
person interested if he makes the payment himself. Authoritative state- 
ments in English books are much more guarded, for example : " If A. is 
compellable to pay B. damages which C. is also compellable to pay B., 
then A., having been compelled to pay B., can maintain an action against 
C. for money so paid, for the circumstances raise an implied request by C. 
to A. to make such payment in his case. In other words, A. can call upon 
C. to indemnify him " (u). 

It will be observed that the obligation had to be stated as a fictitious 
contract in order to find a place for it within the rules of common law 
pleading. The meaning is that C., who did not in fact ask A. to pay, is 
treated as if he had done so. In jurisdictions where the old rules of 
pleading have been abrogated, or were never in force, the fiction is super- 
fluous, and the duty may be expressed, as in this section, in plain and 
direct terms. The late Mr. Leake did this in language which has been 
made authoritative by high judicial approval : 

" Where the plaintiff has been compelled by law to pay, or, being com- 
pelled by law, has paid money which the defendant was ultimately liable to 
pay, so that the latter obtains the benefit of the payment by the discharge 
of his liability, under such circumstances the defendant is held indebted to 
the plaintiff in the amount " (x). 

Such a right to indemnity arises where one man's goods are lawfully 
seized for another's debt, e.g., as being liable to distress, and are redeemed 
by their owner ; the owner will be entitled to indemnity from the debtor, 
though he may have exposed his goods to the risk of distress by a voluntary 
act not done at the debtor's request or for his benefit (y). 

But the English authorities do not cover a case where the plaintiff has 
made a payment operating for the defendant's benefit, but was not under 

(f) The view propounded in the text Ex. 101, 104, and Vaughan Williams, L.J., 

was adopted by Stanley, C.J., in Tulsa in Banner's Case (last note) at p. 173. 

Kunwar v.JagesharPrasad (1906) 28 All. The learned author's words are altered in 

563. the current edition of Leake on Contracts 

(M) Banner v. Tottenham, etc., Building (p. 43), but the sense is unaffected. 
Society [1898] 1 Q. B. 161, 167, per A. L. (y) Edmwids v. Walllngford (1885) 14 

Smith, L.J. Q. B. Div. 811, disapproving England v. 

(a;) Adopted by Cockburn, C.J., in the Marsden (1866) L. R. 1 C. P. 529. 
Ex. Ch., Moule v. Garrett (1872) L. R. 7 



288 THE INDIAN CONTRACT ACT. 

S. 69. any direct legal duty to do so, nor where the defendant >vas not bound to 
pay, though the payment was to his advantage. The assignee of a term of 
years mortgaged the premises by sub-lease. The mortgagees took possession, 
but did not pay the rent due under the principal lease. The original lessees, 
who of course remained liable to the lessors, had to pay the rent, and sued 
the mortgagees to recover indemnity. It was held that the action did not 
lie (2), for there was no obligation common to the plaintiff and the defen- 
dant. It was to the mortgagees' interest that the rent should be paid, 
but no one could call on them to pay it. This case, it would seem, would 
be decided in the same way under the present section. The words " bound 
by law to pay," as they fix the limit of the law in India, mark the point 
beyond which the Court of Appeal refused to extend it in England. 

" Person . . . interested in the payment of money." This section 
only applies to payments made bond fide for the protection of one's own 
interest. A person may be interested in the payment, but if in making 
the payment he is not actuated by the motive of protecting his own 
interest, he cannot recover under this section (a). Thus where A. pur- 
chases property from B., but the sale Is fictitious, A. cannot recover from 
B. money paid by him to save the property from being sold in execution 
of a decree against B. (b). But a putnidar who makes payments on 
account of Government revenue due by his superior landlord, who had 
failed to pay the same, is entitled to recover under this section, even 
though the risk to his putni may be remote, provided he had some interest 
in making the payment (c). Similarly, where A.'s property is wrongfully 
attached in order to realise arrears of Government revenue due by B., and 
A. pays the amount to save his property from sale, he is entitled to recover 
the amount from B. (d). 

It is enough for a person claiming under the provisions of this section 

(2) Banner's Case [1898] 1 Q. B. 161, Mufassal). Cp. Ajudhia Prasad v. Bakar 

167. Sajjad (1883) 5 All. 400, cited in the 

() See Desal Himatsingji v. Bhava- commentary on s. 70. 

bhai (1880) 4 Bom. 643, at p. 652. (d) Ttdsa Kunwar v. Jageshar Prasad 

(J) Janki Prasad Singh v. Baldeo (1906) 28 All. 563; Khushal Singh v. 

Prasad (1908) 30 All. 167. Khawanl (1906) All. W. N. 282. The 

(c) Smith v. Dinonath (1885) 12 Cal. decision in Chunia v. Kundan Lai (1882) 

213 ; Bama Sundari JDasi v. Adhar All. W. N. 149, 150, where it was held 

Chunder (1894) 22 Cal. 28. And see that a vendor, who had paid under com- 

Nath Prasad v. Baij Nath (1880) 3 All. pulsion arrears of revenue payable by 

66 ; and Krishna Kamini Chowdhrani v. the purchaser, was not entitled to recover 

Oopi Mohun (1888) 15 Cal. 652 (where from the purchaser, cannot now be sup- 

the point actually decided was that cases ported, having regard to the decisions in 

falling within ss. 69 and 70 are cognisable the above cases, 
by a Court of Small Causes in the 



PERSONS INTERESTED IN PAYMENT. 289 

to show that he had an interest in paying the moneys claimed by him at S. 69. 
the time of the payment. Thus moneys paid by a person while in possession 
of an estate under a decree of a Court to prevent the sale of the estate for 
arrears of Government revenue may be recovered by him under this section, 
even though the decree may be subsequently reversed and he may be 
deprived of possession (e). In the case now cited the Judicial Committee 
said : "It seems to their Lordships to be common justice that when a 
proprietor in good faith pending litigation makes the necessary payment 
for the preservation of the estate in dispute, and the estate is afterwards 
adjudged to his opponent, he should be recouped what he has so paid by the 
person who ultimately benefits by the payment if he has failed through no 
fault of his to reimburse himself out of the rents " (/). Conversely, payment 
of kist made by a person who had obtained a decree for possession of certain 
lands may be recovered back by him, though the payment may have been 
made when he was not yet put into possession pending an appeal and a second 
appeal (g). Similarly, moneys paid by a mortgagee of a putni tenure to save 
the tenure from sale for arrears of rent pending bond fide litigation between 
him and his mortgagor relating to the amount of the mortgage debt may be 
recovered back under the provisions of this section, even though it may be 
eventually found by the Court that the whole of the mortgage debt was as 
a matter of fact satisfied before the date of payment (h). In a still later 
case (i) the plaintiff purchased a putni taluk at a sale held under Regu- 
lation VIII of 1819 at the instance of the zamindar for non-payment of 
rent by putnidars. The sale was set aside in May, 1894, in a suit brought 
by the putnidars for the purpose against the zamindar and the plaintiff. 
The zamindar alone appealed against the decision, and pending the appeal 
the zamindar called upon the plaintiff to pay rent that had accrued from 
April, 1894, to November, 1894. The plaintiff thereupon paid the rent, and 
in a suit by him against the putnidars it was held that he was entitled to 
be reimbursed the amount by them. The fact that the decision of the 
first Court was in favour of the defaulting putnidars did not affect the 
plaintiff's right to pay the rent, as it was quite possible that that decision 
might have been reversed on appeal. But a person in wrongful possession 
of land making payment of Government revenue is not interested within 
the meaning of this section (,/). In a recent Madras case a Hindu mother 
incurred expenses for her daughter's marriage, and claimed to recover them 

(e) Dakkina Mohan Roy v. Saroda (/<) Bindnbas/tini Dassi v. Harendra 

Mohan Hoy (1893) 21 Cal. 142, 20 L. R. Lai Roy (1897) 25 Cal. 305. 
Ind. Ap. 160. (i) Radha Maclhub Samonta v. Sasti 

(/) 21 Cal. at p. 148. Ram Sen (1899) 26 Cal. 826. 

(//) Chlnnastamy v. Rvthnasabajtath y . (j) Bhida Kuar v. Bhondu Das (1885) 

(1903) 27 Mad. 338. 7 All. 660. 

i.c. 19 



290 THE INDIAN CONTRACT ACT. 

S. 69. from the undivided brother of her deceased husband, who had got the 
family property in his hands, and had improperly refused to perform the 
marriage ceremony. It was held that she was under the Hindu law 
entitled to recover the expenses, the Court intimating at the same time that 
she was a person interested in making the payment within this section (&). 
In Ram Tuhul Singh v. Biseswar Lai (I) the Judicial Committee, in 
dealing with the rights of parties making payments, observed : " It is not 
in every case in which a man has benefited by the money of another that 
an obligation to repay that money arises. The question is not to be con- 
cluded by nice considerations of what may be fair and proper according to 
the highest morality. To support such a suit there must be an obligation 
express or implied to repay. It is well settled that there is no such 
obligation in the case of a voluntary payment by A. of B.'s debt." Thus a 
mortgagor who voluntarily pays the assessment on land mortgaged by 
him, forestalling the mortgagee in possession, who, it is found, was willing 
to pay the assessment as he had done for years past, is not entitled to 
recover from the mortgagee the amount so paid by him (m). Similarly, 
payment made by a mortgagee to prevent the sale of the mortgaged pro- 
perty in execution of a decree against the mortgagor cannot be recovered 
from the mortgagor, if the mortgage was prior to the execution proceed- 
ings (>). And where A., B.'s nephew, believing that he was the heir of B., 
paid the amount of a decree held by C. against B. to prevent the sale of B.'s 
property, and it was subsequently declared in a suit that A. was not B.'s 
heir, it was held by the High Court of Allahabad that the payment made 
by A. was a purely voluntary and gratuitous one, and as such could not be 
recovered (nri). This decision does not appear to be in accord with later 
decisions of the same Court (nnri). 

Suit for contribution. Whether this section applies to a suit for 
contribution where loth the plaintiff and the defendant were liable for the 
money paid by the plaintiff is not clear on the authorities (o). In 
Mothooranath v. Kristokumar (p), where portions of a property subject to 
a mortgage were purchased by the plaintiff and the defendant respectively, 
and the plaintiff alone paid the entire amount of the mortgage debt to 
prevent the estate from sale, it was held by the Calcutta High Court that 

(jfc) Vaikuntam v. Kallapiram (1900) () Sumar Singh v. Shib Lai (1882) 

3 Mad. 512 ; ib. (1902) 26 Mad. 497. All. W. N. 149. 

(0 (1875) 23 W. R. 305 ; 15 B. L. R. (nun) Khuslial Singh v. Khawani (1906) 

208 ; L. R. 2 Ind. Ap. 131. All. W. N. 282 ; Tttlaa Kunwar v. Jage- 

(;) Ramchandra Atmaram v. Damodar s/iar Prashad (1906) 28 All. 563. 

Ramchandra (1899) 1 Bom. L. R. 371. (o) As to contribution between joint pro- 

() Ram Prasad v. Salik Ram (1882) misors and co-sureties, see ss. 43 and 146. 

All. W. N, 210. (jO (1878) 4 Cal. 369. 



PAYMENT OF MONEY DUE BY ANOTHER. 291 

the plaintiff was a person interested in the payment within the meaning of S. 69. 
this section, and that he was entitled to contribution from the defendant. 
In a subsequent case the same High Court doubted whether a suit for 
contribution in respect of money for which the plaintiff and the defendant 
in the contribution suit had been made jointly liable by a former decree 
fell within the scope either of this or the next following section (q). The 
Court was inclined to think that those sections seemed rather to contem- 
plate persons who, not being themselves bound to pay the money or to do 
the act, did it under circumstances which gave them a right to recover 
from the person who had allowed the payment to be made and had 
benefited by it. In a still later case (r), where one co-sharer of land sued 
another co-sharer for contribution for rent of the land paid by him, it was 
held that the plaintiff was not entitled to recover under this section, as the 
defendant was wrongfully kept out of possession by the plaintiff. But for 
that circumstance, it was said, contribution could have been recovered. 
The Court observed : " It seems to us that the provisions of s. 69 of the 
Indian Contract Act, upon which the plaintiff founds his right of suit, are 
not applicable to such a suit as the present. That section, we think, con- 
templates a case in which there are several co-sharers in possession of land 
and where some of them having neglected to pay what is due from them in 
respect of the occupation of the land, one of their number pays what is 
due from all. He may then recover contribution from the rest. But 
here the plaintiff sues to recover expenses which he had by the wrongful 
appropriation of the profits of the defendant's share already received." 
In a Madras case (s), which turned upon the construction of s. 69, it 
was stated in the course of the judgment that "s. 69 and the cases on 
which it is founded (see Moule v. Garrett () ) make it clear that a payment 
made by a party interested may be recovered, and it would be inconsistent 
to hold that services done would not equally give a right of action." 

" Money which another is bound by law to pay." In Mothooranath 
v. Kristokumar (u), above cited, it was contended that this section applied 
only to cases where the person who is there called " the other " was 
personally liable for the debt, and that it did not apply where, as in that 
case, the liability attached to the land. The Court overruled this 

(?) Futteli AH v. Gunganath Roy Boy (1902) 6 C. W. N. 903. 

(1881) 8 Cal. 113, 116. No reference was (.<) Damodara Mudallar v. Secretary of 

made in the. judgment to the case cited State for India (1894) 18 Mad. 88, 92, 

above. See also Nawab Mir Kamaludin cited in the commentary on s. 70. 

v. Partap Mota (1880) 6 Bom. 244, where (0 L. R. 5 Ex. 132 ; on appeal L. R. 

it was held that the section did not 7Ex.l01. 

apply. () (1878) 4 Cal. 369. 

(r) Swarnamoyee Debt v. Harl Das 

192 



292 THE INDIAN CONTRACT ACT. 

S. 69. contention and said : " It is clear from the illustration that that is not 
the intention of the Legislature. The illustration gives the case of a lessee 
paying off revenue due to Government ; but the liability to pay revenue 
due to Government is not a personal liability of the zamindar, but a 
liability which is imposed upon the zamindar's land. It is therefore clear 
that that section was intended to include the cases not only of personal 
liability, but all liabilities to payments for which owners of lands are 
indirectly liable, those liabilities being imposed upon the lands held by them." 

"Bound by law." The liability for which payment may be made 
under this section need not be a statutory one. In a Calcutta case cited 
above (x) it was argued that the words " bound by law " restricted the 
section to liabilities created by some statute, such as liabilities to pay 
revenue, but excluded liabilities which arose out of contracts by parties. 
The Court declined to uphold this contention and observed : " That would 
be putting on the section far too narrow a construction, because it was no 
doubt intended to include such a case as a lessee paying rent to the superior 
landlord for which the intermediate lessee was liable under a covenant." 

An action to recover money paid is not maintainable under this 
section unless the person from whom it is sought to be recovered was 
bound by law to pay it. Thus revenue due on land owned by one who is 
not the registered holder is not money which such an owner is bound to 
pay under the Madras Revenue Recovery Act II of 1864, though it may 
be to his interest to do so, and the registered holder voluntarily paying 
such revenue cannot recover it under this section (y}. Similarly, payments 
made by a second mortgagee to save the mortgaged property from sale 
in execution of a decree for rent obtained by the zamindar against the 
mortgagor under the Bengal Tenancy Act cannot be recovered by him 
from the first mortgagee, as the latter is not bound under s. 69 of that 
Act to pay the rent due by the mortgagor to the zamindar (z). And 
where the income-tax authorities assessed the widow of a deceased Hindu 
in respect of outstandings forming part of the estate of the deceased, 
notwithstanding remonstrances on her part that the outstandings had not 
come to her, but had been bequeathed under the will of the deceased to 
the defendants, and the widow paid the tax, it was held that she could not 
recover the amount from the defendants under this section, for the 
defendants, not being the parties assessed, were not " bound by law " to 
pay the tax (a). In a recent Calcutta case, A. mortgaged his interest in a 

(x) MothooranatTiv.Kristoltumar(\%18) (z) Gangadas v. Jogendra (1907) 11 

4 Gal. 369, 373. C. W. N. 403. 

(y) Boja Sellappa Reddy v. Vrid- (a)RaglMi-anv.AlameluAmmal(\W~) 

Reddy (1907) 30 Mad. 35. 31 Mad. 35. 



PAYMENT OF MONEY DUE BY ANOTHER. 293 

patni taluk to K. A. then sold his interest in the taluk to B., who got S. 69. 
his name registered in the zamindar's books in place of A. Subsequently 
the zamindar threatened to sell the taluk for arrears of rent, where- 
upon K. paid the amount to save his interest in the taluk. K. then 
sued B. to recover the amount from B. B. contended that he was only 
a benamidar for A., and that he was not therefore bound to pay the 
rent. But this contention was overruled, and it was held that, B. having 
held himself out as a purchaser, he was primd facie bound to pay the 
rent, and that K. was entitled to recover the amount from him under this 
section (&). 

The person making the payment must not himself be under a 
legal liability to pay. This section contemplates a case where the 
person who makes the payment is under no legal liability to pay it, and he 
pays the money for another person who is bound in law to pay. If the 
person who makes the payment is himself under a legal liability to pay, he 
cannot recover under this section. Thus the purchaser of a patni taluk at 
a sale in execution of a decree against the holder thereof is bound by law 
to pay all arrears of rent due to the zamindar at the time of sale. If the 
purchaser pays the arrears to save the taluk from sale at the instance of 
the zamindar, he cannot recover the amount from the patnidar, though 
the patnidar enjoyed the profits of the patni during the period for 
which the rent had become due (c). Similarly, a person who buys 
immovable property subject to a charge for maintenance in favour of a 
widow cannot recover from the vendor maintenance money paid by him to 
the widow to save the property from sale at the instance of the widow (d). 

Payment must be to another person. This section applies only 
where one person pays to another money which a third party is bound to 
pay. In The Secretary of Stale for India v. Fernandes (e), there was 
certain land in South Canara which was held by the Government at a 
certain rent as mulgaindar (permanent tenant) under a mulgar (landlord). 
Arrears of revenue were due from the mulgar to Government, and the 
Government, to prevent the land from being sold for the arrears, paid as 
mulgaindar or rather retained the arrears due to itself. It was held 
that, having made the payment to itself, the Government could not 
recover the sum from the mulgar under this section. 

(b) Umcsh Chandra Banerjee v. Khulna (cT) Mangalathammal T. Narayana- 
Loan Company (1907) 34 Cal. 92. swami Aiyar (1907) 17 Mad. L. J. 250. 

(c) Manindra Chandra Nandy v. (e) (1907) 30 Mad. 375. This was not 
Jamahir Kumari (1905) 32 Cal. 643. the only disputable point, but the case 
Compare Kishan Lai v. Megh Singh was disposed of on it. 

1901) All. W. N. 37. 



294 THE INDIAN CONTRACT ACT. 

S. 70. 70. Where a person lawfully does anything for 

obligation of another person, or delivers anything to him, 

ESSt o?nJli" g not intending to do so gratuitously, and such 

other person enjoys the benefit thereof, the 

latter is bound to make compensation to the former in respect 

of, or to restore, the thing so done or delivered. 

Illustrations. 

(a) A., a tradesman, leaves goods at B.'s house by mistake. B. 
treats the goods as his own. He is bound to pay A. for them. 

(b) A. saves B.'s property from fire. A. is not entitled to com- 
pensation from B. if the circumstances show that he intended to act 
gratuitously. 

Non-gratuitous act done for another. This section goes far beyond 

English law (/). By the Common Law, if goods, work, or anything 

valuable be offered in the way of business and not as a gift, the acceptance 

of them is evidence of an agreement a real, not a fictitious, agreement, 

though it need not be expressed in words to pay what the consideration 

so given and taken is reasonably worth. A man is not bound to pay for 

that which he has not had the option of refusing. Under this section it 

would seem that whoever finds and restores lost property, apart from any 

question of a reward having been offered, is entitled to compensation for 

his trouble if he did not intend to act gratuitously. This is certainly not 

the Common Law rule. Illustration (b) is in accordance, no doubt, with 

English law, so far as the negative result goes ; but the only real analogy 

is to be found in the maritime law of salvage and in some other very rare 

cases depending on the same principle. The case of illustration (a) would 

be decided in the same way, but not quite for the same reason. Either B. 

has accepted the goods, in which case he cannot be heard to say that they 

were not intended for him, or he has dealt with them as a mere trespasser, 

in which case he is liable for their value as damages. This does not apply 

to the rare but possible case of B. honestly thinking that the goods came 

from X., of whom he intended to buy such goods. It seems that such a 

case is within the present section, but by the Common Law B. is not liable 

to A. for the price of the goods (g). 

" Certainly, there may be difficulties in applying a rule stated in such 
wide terms as is that expressed in section 70. According to the section it is 

(/) This was recognised in Jarao (g} Boulton v. Jones (1857) 2 H. & N. 
Kuniari v. Basanta Kumar Roy (1905) 564. 
32 Cal. 374, at p. 377. 



NON-GRATUITOUS ACT. 295 

not essential that the act shall have been necessary in the sense that it has S. 70. 
been done under circumstances of pressing emergency, or even that it shall 
have been an act necessary to be done at some time for the preservation of 
property. It may therefore be extended to cases in which no question of 
salvage enters. It is not limited to persons standing in particular relations 
to one another, and, except in the requirement that the act shall be lawful, 
no condition is prescribed as to the circumstances under which it shall be 
done " (/O- 

An equitable principle resembling that of this section is recognised 
in the English law of partnership and companies. Where money has 
been borrowed by one partner in the name of the firm, but without the 
authority of his co-partners, and applied in paying debts of the firm, the 
lender is entitled to call on the firm for repayment of the amount so 
applied (*'). The rule is treated as somewhat peculiar, and is not likely to 
be extended. 

The rule laid down in this section was suggested by the notes to 
Lampleigh v. Brathivait (&), and perhaps indirectly by the Roman law (I) 
(see Whifcley Stokes, Introduction to Contract Act, at p. 533). 

By this section three conditions are required to establish a right of 
action at the suit of a person who does anything for another: (1) the 
thing must be done lawfully; (2) it must be done by a person not intending 
to act gratuitously ; and (3) the person for whom the act is done must 
enjoy the benefit of it. Thus in Damodara Mudaliar v. Secretary of State 
for India (m) eleven villages were irrigated by a certain tank, some of which 
were zamindari villages, and others were held under Government. The 
Government effected certain repairs necessary for the preservation of the 
tank, and it was found that they did not intend to do so gratuitously for 
the zamindars, and that the latter had enjoyed the benefit thereof. The 
zamindars were under the circumstances held liable to contribute to the 
expenses of the repairs (ri). Similarly, where a notice was issued upon 
the owners of a hat by the municipality to effect certain improvements, 
intimating that failure to comply with the notice would lead to a with- 
drawal of the licence granted for holding the hat, and one of the co-sharers 

(/<) Damodara Mudaliar v. Secretary of () It was not found in the case that 

State for India (1894) 18 Mad. 88, at p. 91. there was any request express or implied 

(i) Lindley, Partnership, 6th ed. 201 ; on the part of the zamindars to the 

cp. Partnership Act, 1890, s. 24, sub.-s. 2. Government to execute the repairs, though 

(k) 1 Smith L. C., 10th ed. 136. the Court expressed the opinion that if 

(Z) Per Cur. in Damodara Mudaliar the facts were properly ascertained a 

v. Secretary of State for India (1894) 18 request might have been implied : see 18 

Mad. 88, 91. Mad. at p. 90. 

(i) (1894) 18 Mad. 88. 



296 THE INDIAN CONTRACT ACT. 

S. 70. effected the required improvements, it was held that he was entitled to 
contribution from the other co-sharers (0). Upon the same principle, where 
a mortgagee threatened to sell the land mortgaged to him, and one of the 
co-sharers paid up the mortgage debt to prevent the property from being 
sold, it was held that he was entitled to contribution from the other co- 
sharers (//) But a co-heir is not bound to contribute towards the expenses 
of litigation incurred by other co-heirs in respect of the common property, 
though the litigation may have been carried on bona fide, and though he 
may have benefited by the litigation (q). A mortgagee of immovable 
property can recover from the mortgagor payments made by him for road 
and public works cesses payable by the mortgagor (r). And so where the 
holder of an inain within a zamindari takes for his benefit Government 
water, and the zamindar, who is liable in the first instance to pay to the 
Government the cess for the water so taken, pays the same, he can recover 
the amount of cess so paid from the inamdar (s). 

"Lawfully." By the use of the word "lawfully" in this section the 
Legislature had in contemplation cases in which a person held such a 
relation to another as either directly to create or reasonably to justify the 
inference that by some act done for another person the person doing the 
act was entitled to look for compensation to the person for whom it was 
done (). A payment made by a person fraudulently and dishonestly with 
the intention of manufacturing evidence of title to land which belonged 
to the defendant, and to which he knew he had no claim, is not lawful 
within the meaning of this section (). In such a case it is clear that the 
payment could also not be regarded as having been made for the defendant. 
Similarly, where a purchaser of property, the sale being fictitious and so 
found by the Court in a previous litigation, paid the amount of a decree 
obtained by a third party against his vendor to prevent the property from 
being sold in execution, it was held that the payment was not " lawfully " 
made, and that the purchaser could not recover it from the vendor (.r). 

(0) Jarao Kumarl v. Basanta Kumar (f) Chedi Lai v. Bhagwan Das (1888) 

Roy (1905) 32 Cal. 374. 11 All. 234, 243; see Gordhanlal v. 

(^) Khairat Husainv. Haidri Begam Darbar S/iri Surajmalji (1902) 26 Bom. 

(1888) All. W. N. 10. 504, 518. 

(q) Abdul Wahid Khan v. Shaluka () Desal Himatsingji v. Bhacalhai 

Bibi (1894) 21 Cal. 496, L. R. 21 Ind. Ap. (1880) 4 Bom. 643, 653. 

26 ; Halinia Bee v. Roshan Bee (1907) (#) Jankl Prasad Singh v. Baldeo 

30 Mad. 526. See also Jyani Begam v. Prasad (1908) 30 All. 167. In this case 

Umrav Begam (1908) 32 Bom. 612. the Court thought that the payment was 

(r) Upendra Chandra Mitter v. Tara possibly made with some sinister object. 

Prosanna Mukerjee (1903) 30 Cal. 794. Contrast MurUdhar v. B/tikhi (1885) All . 

(*) Rajah of Venkatagiri v. Vudutha W. N. 219 ; Mohar Singh v. Sher Singh 

Subbarayudu (1907) 30 Mad. 277. (1883) Punj. Rec. no. 42. 



NON-GRATUITOUS ACT. 297 

" Does." This expression includes payment of money. It must not S. 70. 
be supposed that because s. (>!) provides for the case of payment of money, 
therefore the present section excludes that case. There may be cases in 
which a person who is bound to pay a certain sum of money would not 
necessarily be benefited by its payment by another. Those cases would 
fall under s. 69, for benefit received by the payment of money is one of 
the conditions necessary to the application of this section (y). 

"For another person." The principle underlying this section was 
adopted in a Calcutta case(0) decided in 1881, but without any reference 
to the Contract Act. In that case the plaintiffs, bona fide believing that 
they were the owners of a four annas share and that the defendants were 
the owners of the remaining twelve annas share in a putni, paid to the 
zamindar their share of the revenue. In a suit between the parties it was 
declared that the plaintiffs had no share in the putni, and that the 
defendants were entitled to the whole of it. Subsequently the defendants 
paid to the zamindar the revenue on the twelve annas share only, availing 
themselves of the payment by the plaintiffs. It was held that upon those 
facts the plaintiffs were entitled to recover from the defendants the amount 
paid by them, on the principle that " where a payment is made by one 
person for the benefit of another, and that other afterwards adopts that 
payment and avails himself of it, the sum becomes money paid for his 
use." But payment made against the will of the defendant and in the 
course of a transaction which in one event would have turned out highly 
profitable to the plaintiff and extremely detrimental to the defendant could 
not be said to have been made for the defendant, though in the event 
which took place it may have proved beneficial to him (a). Similarly 
payment of revenue by the plaintiff while in wrongful possession of the 
defendant's land and for his own benefit and his own account could not 
be recovered under this section (&). And it has been held that if A. is 
assessed by the income-tax authorities and protests that B. is the party 
properly liable, but pays the tax, A. cannot recover the amount from B., 
for A. cannot be said to have made the payment " for " B. (c). It is not 
clear whether the expression "another person" includes a minor. There 

(y) Smith v. Dhionath (.1885) 12 Cal. Tara Prosanna (1903) 30 Cal. 794. 

213, 217 ; Desai Hlmats'mgji v. Bharabhai (a) Ram Tufiul Singh v. Biseswar Lai 

(1880) 4 Bom. 643 ; Nath Frasad v. Baij (1875) 23 W. R. 305, 15 B. L. R. 208, 

A'ath (1880) 3 All. 66 ; Xobin Krishna L. R. 2 Ind. Ap. 131. 

Base v. JUott Mohun Base (1881) 7 Cal. (*) Binda Kuar v. Bhonda Das (1885) 

573. 7 All. 660. 

(r) Not in Krishna Bose v. Man Moliun (c} Ragharan\.AlameluAmmal(\^Q7) 

Base (1881) 7 Cal. 573 ; Smith v. Dinonath 31 Mad. 35. 
(1885) 12 Cal. 213 ; Upendra Chandra v. 



208 THE INDIAN CONTRACT ACT. 

Ss. 70, 71. are no cases in point (d), but there seems to be no reason why on principle 
the expression should not be interpreted as comprising the case of a 
minor (e). The following general caution should be noted : " The section 
ought not to be so read as to justify the officious interference of one man 
with the affairs or property of another, or to impose obligations in respect 
of services which the person sought to be charged did not wish to have 
rendered "(/). 

"Gratuitously." See for illustrations Ajudhia Prasad v. Bakar 
Sajjad(g], Bama Sundari Dasi v. Adhar Chunder Sarkar(h\ and 
Nathu v. Balwantrao (i). 

71. A person who finds goods belonging to another, 
Responsibility of an ^ takes them into his custody, is subject to 
finder of goods. the game responsibility as a bailee. 

Liability of finder. The position of a finder in English law, especially 
with regard to the possibility of his stealing the thing found, has been the 
subject, of many and subtle distinctions. It does not appear useful or 
desirable to say anything of them here, as it was plainly the object both 
of the Penal Code and of the Contract Act to get rid of them. Any one 
who is curious in the matter may be referred to the late Mr. Justice 
Wright's full discussion of it in relation to the law of theft (&). 

The Indian Penal Code (s. 403, Explanation 2) provides as follows : 

"A person who finds property not in the possession of any other 
person, and takes such property for the purpose of protecting it for, or of 
restoring it to, the owner, does not take or misappropriate it dishonestly, 
and is not guilty of an offence ; but he is guilty of the offence above 
defined [criminal misappropriation of property] if he appropriates it to his 
own use when he knows or has the means of discovering the owner, or 
before he has used reasonable means to discover and give notice to the 
owner, and has kept the property a reasonable time to enable the owner to 
claim it. 

" What are reasonable means, or what is a reasonable time in such a 
case, is a question of fact. 

(d~) In Venkata v. Timmayya, (1898) (/) Damodara Mudaliar v. Secretary 

22 Mad. 314, it was held that, assuming of Statefor India (1894) 18 Mad. at p. 93. 

the section applied to the case of a minor, (#) (1883) 5 All. 400. 

it did not apply under the particular cir- (ft) (1894) 22 Gal. 28. 

cumstances of the case. See also Branson (/) (1903) 27 Bom. 390, 393. 

v. Appasami (1894) 17 Mad. 257. (&) Pollock and Wright on Possession, 

(e) Whitley Stokes, Anglo-Indian Codes, 171 sqq. 
vol. i. 585, note 3. 



PAYMENT MADE BY MISTAKE. 299 

" It is not necessary that the finder should know who is the owner of Ss. 71, 72. 
the property, or that any particular person is the owner of it ; it is 
sufficient if at the time of appropriating it he does not believe it to be his 
own property, or in good faith believe that the real owner cannot be found." 

As to the definition of " bailee " see s. 148, below. 

Liability of per- y% ^ person to whom money has been 

son to whom money * 

If P. aid ' r v thin g paid, or anything delivered, by mistake or 

delivered, by mis- * 

take or under under coercion, must repay or return it. 

coercion. 

Illustrations. 

(a) A. and B. jointly owe 100 rupees to C. A. alone pays the 
amount to 0., and B., not knowing this fact, pays 100 rupees over 
again to C. C. is bound to repay the amount to B. 

(b) A railway company refuses to deliver up certain goods to the 
consignee, except upon the payment of an illegal charge for carriage. 
The consignee pays the sum charged in order to obtain the goods. He 
is entitled to recover so much of the charge as was illegally excessive. 



Payment under mistake of fact or mistake of law. The rule of the 
Common Law is that " money paid under mistake or ignorance of fact may 
be recovered back where the supposed state of fact is such as to create a 
liability to pay the money, which in reality is not due," but " a payment 
made under the influence of a mistake which does not create a supposed 
legal obligation, and which, therefore, as regards the motive of the party, 
is voluntary, cannot be recovered back" (I). In other words, the mistake 
is material only so far as it leads to the payment being made without 
consideration, and a wrong reason not affecting the substance of the 
transaction itself is not a failure of consideration (m). Probably this 
holds in British India (ri). 

Mistake of law is not expressly excluded by the words of this section ; 
but s. 21 shows that it is not included. "The man who has chosen to 
judge his own cause upon all the facts, and has decided against himself, 

(Z) Leake, 63, 64. Kaur (1906) Punj. Rec. no. 131. It must 

(//(>) Balfour v. Sea Fire Assurance be assumed that the circumstances were 

(1857) 3 C. B. N. S. 300. such as to prevent the mistake from being 

() Where a lessee, on the lessor's death, a mere mistake of law. But where money 

pays rent to the lessor's widow, erroneously is paid voluntarily with a full knowledge 

believing that the rent was payable to of all the facts, it cannot be recovered on 

her, and he has to pay the rent over again the ground that the payment was mndo 

to the lessor's executors, he is entitled to under a mistake of fact : Pertab Singh v. 

a refund of the amount paid by him to The Secretary of State (1876) Punj. Rec. 

the widow : Ham Kishen v. Rani Bhagwan no. 94. 



300 THE INDIAN CONTRACT ACT. 

S. 72. cannot appeal to the Court against his own judgment, whether it was well 
informed or not " (0). Thus payment made by A. to B. upon a miscon- 
struction of the terms of a lease cannot be recovered back ( p ). 

A debtor may recover from a creditor the amount of an over-payment 
made to him if it was made by mistake^). Similarly a bonafide payment 
of money by a Treasury officer, under the imposition of gross fraud, to the 
defendant, who was the innocent agent of the person who contrived the 
fraud, may be recovered back from him though the defendant may have 
paid the money to the principal (;). 

Involuntary payment. A payment made under coercion is an in- 
voluntary payment. But a payment may be involuntary though made 
otherwise than under coercion; and though the present section does not 
deal with such cases, the Act is no bar to the recovery of the payment (s). 
The section in no way affects the principle of law that, where the defendant 
has received money which in justice and equity belongs to the plaintiff 
under circumstances which render a receipt of it a receipt by the defendant 
to_Jhe_use_of_the plaintiff, the plaintiff is entitlecTto recover (fj. Thus 
where the plaintiff purchased certain property in execution of a decree, 
and the defendant, who held a decree against the former owner of the 
property, proceeded to execute it against the same property, and the 
plaintiff paid the amount of the defendant's decree into Court, it was held 
that he was entitled to recover back the amount, as the payment was 
involuntary (it). In Fatima Khatoon v. Mahomed (x), the plaintiffs, who 
were Mahomedan ladies, were entitled to a charge on certain property in 
respect of their dower. The defendants, who were holders of a decree 
against the heirs and representatives of the person to whom the property 
belonged, obtained leave in execution proceedings to sell the property. In 
order to prevent that sale, which would have been injurious to them, the 
plaintiffs paid under protest the amount of the defendants' decree into 
Court. In a suit to recover back the amount it was held by the Judicial 

(0) Pollock, Law of Fraud in British (1901) 25 Mad. 548. 

India, p. 128. () 16 Cal. 656. The Court also 

(p) Khozan Sing v. The Secretary of observed : " We are not prepared to say 

State (1878) Punj. Rec. no. 33. that the defendant's conduct did not 

(if) Sadr-un-nisa v. Muhammad Jan amount to a ' detainer of the plaintiff's 

(1880) 2 All. 671, 674. property to the prejudice of the plaintiff 

() Shugan Chand v. The Government with the intention of causing him to enter 

A 'ort/i- Western Provinces (1875) 1 All. 79, into an agreement,' viz. an agreement to 

following 2'wgman v. Hopkins, 4 Man. & pay the debt of a third person" (at 

G. 389. p. 665). 

(*) Jug deoNarain Singh v. Rajah Singh, (#) (1868) 12 M. I. A. 65 ; S. C., 10 

(1888) 15 Cal. 656. W. R. P. C. 29. 

(Q Narayansami v. Osuru Jteddi 



PAYMENT MADE UNDER COERCION. 301 

Committee that the payment was made "not voluntarily, but under a S. 72. 
species of compulsion," and that they were, therefore, entitled to a decree. 
And in a subsequent case it was held by the same tribunal that a payment 
made by the purchaser of a property to prevent its sale in execution of a 
decree obtained by a mortgagee whose debt had been satisfied can be 
recovered back, as it was made "under force of these execution pro- 
ceedings " (y}. It will be noted that the payment made in the above 
cases was made to prevent the sale. But where property belonging to A. 
has been sold in execution of a decree against B., and A. has the sale set 
aside by making a deposit under s. 310A of the Civil Procedure Code 
(now 0. 21, r. 89), A. is not entitled to recover the amount paid from the 
decree-holder (0). Similarly, where a zamindar claimed and realised from 
a tenant a sum of money equivalent to a fourth share of the price of trees 
cut down and sold by the tenant, basing his claim on general usage, the 
tenant may recover the amount as money had and received by the 
defendant for the plaintiffs use (a). 

Wrongful payment. There is a class of cases which, though not 
directly bearing on this section, may be conveniently dealt with in this 
place. They are cases where money is paid in execution of a decree, and 
it is sought to recover back the amount on the reversal of the decree. In 
such a case the payment, though in the first instance lawful, becomes 
wrongful on the reversal of the decree (b). The rule of law on this 
subject is that money paid under a decree cannot be recovered back in a 
fresh suit whilst the decree remains in force. But if the decree is 
reversed or superseded the amount paid under it is recoverable. And it 
has been held in effect by the Judicial Committee that a decree will be 
deemed to be superseded, though not actually reversed, if it was made 
pending an appeal to a higher Court from an antecedent decree on the 
same cause of action, and the latter decree is reversed by the appellate 
Court, and the order of reversal was intended to deal with all the rights 
and liabilities of the parties under it(c), the principle being that where 

(y) Dulichand v. RamMshen Singh Court of Small Causes as being a suit for 

(1881) 7 Cal. 648 ; S. C. L. R. 8 Ind. Ap. 93. money which had come into the hands of 

(z) Kunja Beliari Singha v. Bhupendra the defendant under such circumstances 

Kumar Dutt (1908) 12 C. W. N. 151. A.'s that he must be taken to hold it to the 

proper remedy was to institute a regular use O f the plaintiff. 

suit for a declaration of his title, and not (j) p er Cur., Jogesh Chunder Dutt v. 

to make a deposit under s. 310A of the Kali Churn Dutt (1877) 3 Cal. 30, 38. 

Code. (c) Shama Purshad Roy v. Hurro 

() Collector of Cawnpore v. Kedari Purshad Rinj (1865) 10 M. I. A. 203, 

(1881) 4 All. 19. The actual point decided followed by a majority of the full Bench 

was that the suit was cognisable by the in Jogesh Cltunder Dutt v. Kali Churn 



302 THE INDIAN CONTRACT ACT. 

Ss. 72, 73. the main decree which is the basis of subsequent decrees is reversed the 
latter decrees, being subordinate and dependent decrees, are superseded (d). 
See Code of Civil Procedure, 1908, s. 140. 

Compare s. 86 of the Transfer of Property Act, which provides that 
where property is transferred in pursuance of a contract which is liable to 
rescission, or induced by fraud or mistake, the transferee must, on receiving 
notice to that effect, hold the property for the benefit of the transferor 
subject to repayment by the latter of the consideration actually paid. 

CHAPTER VI. 
OF THE CONSEQUENCES OF BREACH OF CONTRACT. 

73. When a contract has been broken, the party who 
Compensation for suffers by such breach is entitled to receive, 
caused bybreach ^ rom ^ e party who has broken the contract, 
of contract. compensation for any loss or damage caused to 

him thereby, which naturally arose in the usual course of 
things from such breach, or which the parties knew, when 
they made the contract, to be likely to result from the 
breach of it. 

Such compensation is not to be given for any remote 
and indirect loss or damage sustained by reason of the breach. 

When an obligation resembling those created by contract 
has been incurred and has not been discharged, 

Compensation for 

failure to discharge any person injured by the failure to discharge 

obligation . . . , . 

resembling those it is entitled to receive the same compensation 

created by contract. *, * 

from the party in default as if such person 

had contracted to discharge it and had broken his contract. 

Explanation. In estimating the loss or damage arising 

from a breach of contract, the means which existed of 

Dutt (1877) 3 Cal. 30. In the former of give a right for the recovery of the 

these cases there were several decrees for amount paid under them, 

interest on a bond, in the latter for (d) (1877) 3 Cal. 30,37, 38. See Kisheu 

enhanced rent. The reversal of one of Sahai v. Balthtawar Singh (1898) 20 All. 

those decrees by the Privy Council was 237, where it was held that there was no 

held to have superseded all other decrees such supersession of the decrees as in the 

obtained during the pendency of the Privy Council cases cited above, 
appeal to the Queen in Council, so as to 



DAMAGES FOR BREACH OF CONTRACT. 303 

remedying the inconvenience caused by the non-performance S. 73. 
of the contract must be taken into account. 

Illustrations. 

(a) A. contracts to sell and deliver 50 maunds of saltpetre to B. at 
a certain price, to be paid on delivery. A. breaks his promise. B. is 
entitled to receive from A., by way of compensation, the sum, if any, 
by which the contract price falls short of the price for which B. might 
have obtained 50 maunds of saltpetre of like quality at the time when 
the saltpetre ought to have been delivered. 

Note. Generally it is "quite settled that on a contract to supply goods 
of a particular sort, which at the time of the breach can be obtained in the 
market, the measure of the damages is the difference between the contract 
price and the market price at the time of the breach." But the subject- 
matter of the contract may not be marketable. In that case the value 
must be taken as fixed by the price which actually has to be paid for the 
best and nearest available substitute : Hinde v. Liddell (1875) L. R. 10 
Q. B. 265, 269 ; ElUnger Actien-Gesellschaft v. Armstrong (1874) L. R. 9 
Q. B. 473, 476. Again, if the buyer, after giving the seller time at his 
request, finally has to go into the market and buy at an advanced price, he 
may recover the whole difference between the contract price and the price 
he actually paid : Ogle v. Earl Vane, Ex. Ch. (1868) L. R. 3 Q. B. 272. 
" The defendant, in effect, bought forbearance, and must pay for it " : 
Willes, J., at p. 280. 

" Obviously value created for special purpose is irrelevant, and it is for 
this reason that the prices made by bulls and bears are of no use to us. If 
the market value is uncertain, then we must have recourse to such 
surrounding circumstances as affect the probabilities, and among them to 
real prices proved about the time of due date. Now market price is to a 
great extent based on, and made up of the views of, those engaged in a 
particular business and familiar with its incidents. These views are based 
not only on transactions in which a man may himself have been actually 
engaged, but also on the general rumour and reputation in the market. 
Therefore, a man may be a competent witness for the purpose of testifying 
to market value, though he may not himself have been engaged in or 
carried through any dealing in the market at the particular date in question. 
We cannot then exclude from consideration any evidence on this point 
merely because the deponent may not himself have bought or sold on the 
due date " (e). 

[A. agrees to purchase B.'s house at Rs. 5,500. A. afterwards refuses 

(e) Shridhan Gopinath v. Gordhandas In the first sentence " purpose " appears 
Gokuldas (1902) 26 Bom. 235, at p. 239, to be a misprint for "purposes." 



304 THE INDIAN CONTRACT ACT. 

S. 73. to complete the purchase. The house is then sold by auction in execution 
of a decree against B., and realises Rs. 3,100 net. B. is entitled to receive 
from A. by way of compensation Rs. 2,400 : Hohunlal Tribhoivandas v. 
Chunilal Httrinarayan (1902) 4 Bom. L. R. 814. 

Where the defendant contracted to deliver to the plaintiff at Bombay 
1,000 tons of a certain species of coal from February to June, and failed to 
deliver any of the coal, and no purchase was made by the plaintiff against 
the defendant's contract, and there was practically no coal in Bom-bay of 
the description contracted for at the dates at which delivery should have 
been given, the Court received in evidence a statement produced by the 
plaintiff showing the rates at which he had during the contract period 
settled certain contracts for the same coal with other persons, to ascertain 
the actual value of the coal on the dates of the breach : Jagmohundas v. 
Nusswwanji (1902) 26 Bora. 744.] 

(b) A. hires B.'s ship to go to Bombay, and there take on board, 
on the first of January, a cargo which A. is to provide, and to bring it 
to Calcutta, the freight to be paid when earned. B.'s ship does not go 
to Bombay, but A. has opportunities of procuring suitable conveyance 
for the cargo upon terms as advantageous as those on which he had 
chartered the ship. A. avails himself of those opportunities, but is 
put to trouble and expense in doing so. A. is entitled to receive 
compensation from B. in respect of such trouble and expense. 

[Note. A. contracts with B. to provide a ship on a certain day to receive 
a cargo of coal to be carried to Havre. A. fails to provide the ship in time, 
and B. has to charter vessels at an advanced freight and also buy coal at a 
higher price. B. can recover from A. the increase of price as well as the 
increase of freight, unless A. can show that, by reason of a corresponding 
increase in the market price at tha port of delivery or otherwise, the loss is 
compensated wholly or in part : Featherston v. Wilkinson (1873) L. R. 8 
Ex. 122.] 

(c) A. contracts to buy of B., at a stated price, 50 maunds of rice, 
no time being fixed for delivery. A. afterwards informs B. that he 
will not accept the rice if tendered to him. B. is entitled to receive 
from A., by way of compensation, the amount, if any, by which the 
contract price exceeds that which B. can obtain for the rice at the time 
when A. informs B. that he will not accept it. 

(d) A. contracts to buy B.'s ship for 60,000 rupees, but breaks his 
promise. A. must pay to B., by way of compensation, the excess, if 
any, of the contract price over the price which B. can obtain for the 
ship at the time of the breach of promise. 

(e) A., the owner of a boat, contracts with B. to take a cargo of 
jute to Mirzapur for sale at that place, starting on a specified day. 



DAMAGES FOR BREACH OF CONTRACT. 805 

The boat, owing to some avoidable cause, does not start at the time S. 73. 

appointed, whereby the arrival of the cargo at Mirzapur is delayed 

beyond the time when it would have arrived if the boat had sailed 

according to the contract. After that date, and before the arrival of 

the cargo, the price of jute falls. The measure of the compensation 

payable to B. by A. is the difference between the price which B. could 

have obtained for the cargo at Mirzapur at the time when it would 

have arrived if forwarded in due course and its market price at the 

time when it actually arrived. 

[Note. There is not any general rule that damages cannot be recovered 
for Joss of market on a voyage by sea : " wherever the circumstances admit 
of calculations as to the time of arrival and the probable fluctuations of the 
market being made with the same degree of reasonable certainty in the 
case of a sea as of a land transit, there can be no reason why damages for 
late delivery should not be calculated according to the same principles in 
both cases " : Dunn v. JJucknall Bros. [1902] 2 K.B. 614, 622, C.A. per 
Cur., holding that the earlier decision of the C.A. in The Parana (1877) 2 
P. Div. 118, had not laid down anything to the contrary. It must depend 
on the circumstances, including the character of the navigation undertaken, 
what amount of reasonable anticipation can be held practicable. Modern 
commerce tends to become more certain by sea no less than by land, and 
perhaps in a more marked degree.] 

(f) A. contracts to repair B.'s house in